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Home Loans & Related News

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  • Re : Home Loans & Related News

    Home loan rate hikes have little impact on real estate demand, say developers-Business Journal




    The increase in home loan interest rates by banks has had a minimal effect on real estate demand. New residential projects across geographies are witnessing a surge in bookings, with some getting sold out within a few days, say developers.

    Real estate players and market watchers say consumers are not holding back purchases, using a few mitigating factors such as bringing down the loan-to-value ratio, extending the tenure of the loan, and banking on an expected increase in salaries this year.

    Arvind Subramanian, Managing Director and CEO, Mahindra Lifespace Developers (MDL) said, “Consumers now take a few more quarters to save on their corpus. They increase their own contribution to manage EMIs. Within a certain range, there is a sentimental value to interest rates, but it is not so much of a worry. These rate hikes were expected, as we could not have had 6.6 per cent mortgage rates forever.”

    MDL’s newly launched project in Bengaluru, featuring 1 BHK to 3.5 BHK apartments, was sold out within three days. The company’s project in Gurugram was fully sold in a single day.

    In Mumbai, residential player Sunteck Realty project in Vasai, branded Sunteck Beach Residences, received an overwhelming response.

    Rohan Khatau, Director, CCI Projects (CCIPPL)-Rivali Park, said, “Despite the revision in interest rates, demand will remain strong because of pent-up demand, strong affordability levels, and positive sentiment.”

    It is widely expected that the Reserve Bank of India (RBI) will continue to hike rates in an effort to tame inflation. The banks will follow suit and pass on these hikes to consumers. Market watchers added that home loan interest rates would peak at 8.5 per cent before climbing down again.

    According to a report by Kotak Institutional Equities, housing EMIs may increase by 14–18 per cent from FY22 levels at the end of the current interest rate cycle. Home loan rates have increased by 90 basis points from recent lows.

    “We see a moderate impact of higher mortgage rates on EMIs and the Indian housing market. We see two mitigating factors. One, salaried individuals will get an increment of 5-7 per cent, with domestic inflation averaging around 5-6 per cent, which will improve the EMI/income ratio. Two, new home-buyer can increase the tenure of the loan, to keep EMIs stable, “the report added.

    Developers, however, expect that further rate hikes to the tune of 1-1.5 per cent would have some impact on demand a section of buyers who would tend to hold back their purchases, they clarified. “If the rates go up by another 1–1.5 per cent, then there will be an impact,” Subramanian added.

    Buyers have seen a 10–15 per cent increase in real estate prices over the past year, thanks to the incessant increase in the cost of raw materials such as steel, cement, aluminium, and plastics. Such hikes, developers say, may continue due to the ongoing cost-inflationary trends.

    Published on

    June 20, 2022







    Home loan rate hikes have little impact on real estate demand, say developers-Business Journal - Business News (business-journal.in)
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    • Re : Home Loans & Related News

      LIC Housing Finance hikes lending rate by 60 bps from today. Check home loan rates here


      Life Insurance Corporation-backed LIC Housing Finance has raised its prime lending rate by 60 basis points with effect from Monday onward. With this hike, the interest rate on home loans has also risen making EMIs costlier.

      Managing Director and Chief Executive Officer Y Viswanatha Gowd said, "The interest rate hike is in line with the market scenario. If compared historically, the rates are still at a very competitive level. Therefore, we will see sustenance in demand for home loans," reported by PTI.

      The new interest rates on home loans will now start from 7.50% with effect from June 20, as per the company's statement.

      As per the website, LIC Housing's prime lending rate (LHPLR) is set at 15.30%.

      The interest rate is at 7.50% on home loans above or equal to ₹10 lakh for salaried and professionals. Also, the borrowers can only avail of this interest rate on a CIBIL score of greater or equal to 700.

      Furthermore, salaried and professionals having CIBIL greater or equal to 700, will pay an interest rate of 7.55% on home loans up to ₹50 lakh, 7.755 on more than ₹50 lakh to ₹2 crore, and 7.90% on housing loans above ₹2 crore to ₹15 crore.

      On CIBIL scores between 600-699, the interest rate will be 7.80% up to ₹50 lakh, 8% on more than ₹50 lakh up to ₹2 crore, and 8.15% on above ₹2 crore and up to ₹15 crore.

      Less than 600 credit score will lead up to an 8.25% interest rate on home loans up to ₹50 lakh, 8.45% on over ₹50 lakh to ₹2 crore, and 8.65% on more than ₹2 crore to ₹15 crore.

      On credit scores between 101-200 or NTC, the interest rate is 8.20% on loans up to ₹50 lakh, and 8.40% on more than ₹50 lakh to ₹1 crore for salaried and professionals.

      Banks and financial institutions have begun to hike their lending rates after RBI increased the policy repo rate by 50 basis points to 4.90% for taming multi-year high inflation. So far in two months to date, RBI has hiked the repo rate by 90 basis points.










      LIC Housing Finance hikes lending rate by 60 bps from today. Check home loan rates here | Mint (livemint.com)
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      • Re : Home Loans & Related News

        Bajaj Housing Finance Announces Home Loan Interest Rate Change; Offers One of the Most Competitive Rates Starting at 7.20%

        A modification in interest rates for Bajaj Housing Finance's products has been announced. For salaried and professional applicants, the company's house loan interest rates currently begin as low as 7.20 percent * p.a., making them one of the most competitive on the market right now.

        PTI
        June 22, 2022 / 04:11 PM IST
        Representative Image

        Bajaj Housing Finance announces an interest rate change for its products. The company's home loan interest rates now start as low as 7.20%* p.a. for salaried and professional applicants – one of the most competitive in the market today. Eligible borrowers can pay EMIs starting at just Rs. 679/Lakh*.Bajaj Housing Finance announces an interest rate change for its products.

        Bajaj Housing Finance was among the first HFCs to offer external benchmark-linked home loans. Extending its earlier industry-first offering, the Company has revised its interest rate for repo rate linked home loans to 7.30%* p.a. onwards for eligible salaried and professional applicants, which is among the lowest one can avail of at present.

        The Bajaj Housing Finance Home Loan offers sizeable finance to the tune of Rs. 5 Cr.* or higher, basis eligibility, with a repayment tenor of up to 30 years. Borrowers also benefit from hassle-free processing with an online application feature, minimal documentation, and doorstep pick-up service.

        Those with an existing home loan can also make the most of the Company's home loan offerings by availing of a home loan balance transfer. Borrowers can transfer the balance amount on their home loan to Bajaj Housing Finance for interest rates starting as low as 7.35%* p.a. for salaried and professional applicants, with EMIs at just Rs. 689/Lakh*.

        When transferring their home loan, borrowers also have the option to avail of a top-up loan of Rs. 1 Cr.* or higher, basis eligibility. The amount comes with no end-use restrictions, i.e., one can choose to spend it as they deem fit.

        Bajaj Housing Finance Limited is a 100% subsidiary of Bajaj Finance Limited – one of the most diversified NBFCs in the Indian market, catering to more than 57 million customers across the country. Headquartered in Pune, Bajaj Housing Finance Limited offers finance to individuals as well as corporate entities for the purchase and renovation of homes, or commercial spaces. It also provides loans against property for business or personal needs as well as working capital for business expansion purposes. The Company also offers finance to developers engaged in the construction of residential and commercial properties as well as lease rental discounting to developers and high-net-worth individuals.

        Bajaj Housing Finance Limited enjoys the highest credit ratings from CRISIL as well as India Ratings. The Company is rated AAA/Stable for its long-term debt programme and A1+ for its short-term debt programme from CRISIL and India Ratings.Bajaj Housing Finance Limited is a 100% subsidiary of Bajaj Finance Limited – one of the most diversified NBFCs in the Indian market, catering to more than 57 million customers across the country. Headquartered in Pune, Bajaj Housing Finance Limited offers finance to individuals as well as corporate entities for the purchase and renovation of homes, or commercial spaces. It also provides loans against property for business or personal needs as well as working capital for business expansion purposes. The Company also offers finance to developers engaged in the construction of residential and commercial properties as well as lease rental discounting to developers and high-net-worth individuals.


        PTI








        Bajaj Housing Finance Announces Home Loan Interest Rate Change; Offers One of the Most Competitive Rates Starting at 7.20% (moneycontrol.com)
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        • Re : Home Loans & Related News

          Rising home loan rates hit buyers

          By Sruti Venugopal
          Published: Published Date - 12:01 AM, Sat - 2 July 22
          Hyderabad: After almost a decade, the real estate sector was able to stabilise its property prices in 2019 with home loan rates going down and the purchasing power of buyers growing. However, in the last two quarters, the affordability index, which tracks EMI to income ratio, has gone down marginally all thanks to the recent rise in home loan rates post two consecutive hikes in repo rates by RBI.

          The rising rates is hitting not just buyer sentiment but also impacting developers’ intent to construct new properties and also the sales. A recent study on affordability index for the first half of 2022 mentioned that all markets in India are seeing a decline in affordability due to the recent rise in home loan rates as a result of the 90 bps rise in Repo Rates.

          Knight Frank’s proprietary Affordability Index, which tracks the EMI to income ratio for an average household, witnessed steady improvement from 2010 to 2021 across the eight major cities especially during the pandemic when the Reserve Bank of India cut the Repo Rates to decadal lows.

          “However, with two consecutive REPO rate hikes, the cumulative 90 bps rate hikes by RBI has decreased home purchase affordability on an average by 2 per cent across markets and increased EMI load by 6.97 per cent,” the study says.

          Many reports also point out that the repo rate hike has also come in at a time when the prices of property across cities has also gone up significantly over the past few years. Developers and builders are looking at recovering the loss the sector incurred during the pandemic period of 2020 and 2021 – to some extent.

          Hyderabad market

          The study by Knight Frank India points out that Hyderabad is the second most expensive residential market in the country. From 47 per cent in 2010, the home purchase affordability index had improved to 33 per cent in 2019 – a positive sign for property buyers and sellers. In addition, the advent of the pandemic in early 2020, the affordability index further improved to 31 per cent in 2020 and again to 29 per cent in 2021.

          However, post the two consecutive rate hikes by the central bank and the growing prices of property in the city has once again pushed the affordability index to a higher number. In the first half of 2022, the affordability index of the city currently stood at 31 per cent.
          Knight Frank CMD Shishir Baijal said, “The home affordability, due to the rise in home loan rates by 90 BPS, has worsened in the last couple of months. On an average, affordability has decreased by 200 – 300 basis points across the major markets. However, despite the hike in the rates, markets remain largely affordable. This, coupled with the positive change in sentiments towards home ownership, we expect demand to remain unhindered with the momentum backed by the latent demand in the market continuing. Further, factors like strong economic growth outlook, financial stability and job security, the purchasing capabilities of potential buyers are expected to remain intact.”

          Affordability index of 8 cities





          Source: Knight Frank Research










          Rising home loan rates hit buyers (telanganatoday.com)
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