The announcement by the RBI is positive news for stable income home loan borrowers, as interest rates in this segment will drop by 40 basis points (100bps equal to 1 percentage point) to about 7%. This is the lowest rate in over 10 to 15 years.
In addition, borrowers facing income instability due to the Covid-19 lockout will take advantage of an extended three-month moratorium to get their finances under control.
Those customers who've not so far taken advantage of a moratorium but now face pressure on salary can still defer their repayments for three months. On something like a Rs 30 lakh loan with a maximum 15-year maturity the net incremental interest will be around Rs 2.34 lakh — equivalent to eight EMIs. A part of the responsibility could decline as a result of interest rate cuts.
To current lenders, SBI 's home loan interest rates up to Rs 30 lakh will drop immediately to 7 % from the current 7.4 %, loans between Rs 30 lakh and Rs 75 lakh to 7.25 % from 7.65 %, and above Rs 75 lakh to 7.35 percent from 7.75 percent. The rates would be further decreased by 5bps for borrowers women.
Interest has been dropped by 1.4 % since October 2019 when home loan rates were connected to the repo rate. The EMI on a Rs 30 lakh loan in October 2019 is now down to Rs 19,959 from Rs 22,855 — a reduction of Rs 2,896.
Housing finance providers and those banks that haven't related their home loan rates to the repo rate cannot pass on their home loans reduction. HDFC, however, has already reduced its prices to 7.50 percent driven by demand.
The RBI had pushed banks to connect their interest rates on priority sector loans – including home loans – to an external benchmark rate (EBR) to improve market transmission. Most banks have opted for repo rate as their EBR.
Some banks such as SBI risen the distribution on home loan rates for new borrowers by 20bps on May 8, by growing the margin over and above the 7.05 percent benchmark rate tied against the repo rate.SBI did so, saying that the credit risk of lenders had risen due to the pandemic, and that the bank had raised the interest rate by 20bps.
Most banks have stated that the decline in the repo rate does not reduce their loan costs, but contributes to reducing interests rates for existing borrowers. The banks may therefore return to raising spreads. A senior banker said banks would bypass the lowering of the rates to suit the latest round of repo rate reductions.
Impact on Real Estate Segments:
RERA Registers Builder Segments:Announcement from RBI about 2nd moratorium will be helpful for all, after reducing the repo rate by RBI, because RERA registered builder are having large ready stock of property units where they invested his/her large amount of money, hereafter they also will get very good response for property buyers, it will help builders to reduce their debt and give liquidity, it will also help to all connected construction labour jobs, Cements traders, steels industries, bricks industries where working millions of labour in across the country.
Non RERA registered BuilderPropertyhome Loans:All projects with Less than 500 Square Meter plot size are waived for RERA registration, these small unites developed lesser amount of investments as compere with RERA registered units, so these units are available at less cost as compare to large township, but the main disadvantage of these units are the amenities, but the risk is also involves to timely completion of projects, so be careful and select this property option with ready possession option only.
Benefits to New Home Loan Borrowers after second reduction of Repo rate: This the best time ever for all housing loan customers, if you are waiting for a good time for low interest rates, don’t miss this opportunity, no need to go out in this pandemic situation, just go online and check best property offers available near by your preferred location, customer have strong negotiation power this time to ensure our end do apply for housing loan through Dealsofloan and get principle sanction on home loan and then start negotiate with builder on the table.
COVID period Home Loan Provider Banks/ HFCs:
Bank of Baroda COVID time Digital Home Loan: BOB is the first nationalised bank with digital home loan processing features, currently BOB is offering lower interest rates on housing loan for salaried and self employed customers. BOB is offering digital home loan with its SMS branches in across the country.
PNB Housing COVID time digital Home Loan: PNB housing is one of the most popular home loan option is in the market, customers and builders both are preferring PNB Housing for getting instant approval on housing loans, PNB housing is now available with salaried and self employed both segments with speedy processing & advance programs.
HDFC Housing Loan COVID Digital Application: Avail the opportunity with India’s largest housing loan lender with smart digital application flow for all, nation wide available with more than 600 locations for all customers for approved propertied with respective property approval authority in India like Collector NA/ Nagar Nigam, Town Development Authority etc also HDFC started its most popular “Reach Program” for all customers.
Axis Bank COVID Home Loan: Axis Bank also started offering housing loans for all customers, bank has already reduced its interest rates as per the RBI guideline, now Asha home loan is also available at this pandemic time.
Aadhar Housing COVID housing Loan: Aadhar housing is one of the largest affordable housing loan provider housing finance company in India, now started its home loan process in all COVID green zone areas, where COVID red zone/ contentment zone are still stopped for loan application processing.
COVID Smart Housing loan Process: Now the housing loan process is so easy for all and it’s just available on your fingertips now with DOL Customers/ DOL partner app, Customer/ DOL DSA partner can check instant eligibility from various banks instantly and apply in most prominent bank and get same day approval from the selected banks.
Download DOL Partner App Here: https://bit.ly/3c0Pj9e
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