By Varun Singh

Several banks like the State Bank of India (SBI), Kotak Mahindra, Bank of Baroda (BoB) and Punjab National Bank (PNB) are offering loans at record low-interest rates to cash in the spending rush ahead of the festive season.

State Bank of India (SBI) will charge home loan borrowers an interest of 6.7% based on their credit score, irrespective of the loan amount. The offers are available to all segments of borrowers irrespective of the profession of the borrower. The 6.70% home loan offer is also applicable to balance transfer cases.

Kotak Mahindra Bank has reduced its home loan interest rates by 15 basis points (bps) from 6.65% to 6.50% p.a. This special rate of 6.50% p.a. is a limited period festive season offer beginning 10th September and ending 8th November 2021.

Bank of Baroda (BoB) is offering a waiver of @0.25% in the existing applicable rates for home and car loans. In addition to that, the bank is also offering a waiver of processing fees in home loans. Now, home loan rates will start at 6.75% and car loan rates start at 7.00%.

Punjab National Bank (PNB) too has slashed the repo-based lending rate by 25 basis points (bps) to 6.55%.

HDFC too, announced a festive offer with home loans starting from 6.70 per cent. This offer will be applicable to all new loan applications irrespective of the loan amount or employment category. The special festive offer at 6.70 per cent is for all loan slabs and for all customers with credit score of 800 and above.

Real estate experts feel that these interest rate cuts could be a major factor in boosting the home sales this festive season.

Vedanshu Kedia, Director, Prescon Group said, “It is an encouraging move by the leading banks to slash interest rates especially during the onset of the festive season. Even now, a low-interest rate by reputable banks is bound to catapult unimaginable economic growth in the country as a result of enhanced consumption. The initiative will surely make homeownership affordable and viable for the fence-sitters who can now plunge on the best opportunity to buy their dream home.”

Cherag Ramakrishnan, Managing Director CR Realty said, “Considering the auspicious festive season ahead, the timing of the reduction in interest rates by leading banks couldn’t have been better. The real estate market has seen decent sales this year and this reduction in interest rates would further help to keep up the sales momentum.”

Bhushan Nemlekar, Director, Sumit Woods Limited said“The reduction in home loan rates by leading banks is going to help the demand side immensely. The real estate sector has benefited immensely from the record low home loan rates. Currently, the all-time low, sub-7% interest rates are encouraging consumers to proceed with their purchase and quickly close their transactions. Low interest rates also help enhance eligibility for home buyers thereby bringing more customers into the marketplace.”

Pritam Chivukula – Co-Founder & Director, Tridhaatu Realty and Hon. Secretary, CREDAI-MCHI said, “The reduction in home loan interest rates by leading banks for a limited period have extended the best buying opportunity for the homebuyers. The banks are competing to grab the home loan customers before the fiscal year ends. Currently, the home loan rates are at an historic 15 year low, as banks compete in a market with low credit demand. The benign interest rates environment will continue for some time and it is unlikely that interest rates will fall further from the current levels. For the next few days, the buyers can swoop in on good deals on the back of rock-bottom interest rates on home loans along with festive offers from good developers on the eve of expected price rise. We can already see that the demand for residential properties has picked up now as people are beginning to believe that this is the best time to buy a property.”

Ashok Mohanani – President, NAREDCO Maharashtra said, “There is already a growing desire of owning a home as consumers look at it as a necessity in this unprecedented time of the COVID-19 pandemic. With the onset of the festive season, there is a stiff competition amongst the financial institutions to provide the consumers with the best home loan interest rates. This is the best time to buy a home as it gives the aspiring homebuyers a lifetime opportunity to purchase their dream home with various festive offers as well as all-time low interest rates. These factors are also proving to help spur the real estate demand that was temporarily hit last year as a result of the pandemic.”

Jayesh Rathod, Executive Director, The Guardians Real Estate Advisory said, “The move to reduce interest rates by few banks is encouraging and will create competitive housing finance options for the home buyers and eventually pave path for robust housing demand. We have been maintaining since long that banks need to pass on the benefits of the reduced repo rates to consumers and we are happy to see the same happen now. The low interest rate regime is going to be a game-changer for the whole real estate sector especially at a time when the economy is on a recovery trail. It will also augur well for ready-to-move-in homes and the affordable housing segment. Both of these categories will benefit immensely from the reduced rates. From the consumer perspective, this is going to be the last call to take advantage of the bank offers as a difference of even a half percentage on the interest rate on a housing loan can save lakhs of rupees of the prospective buyers.”

Also Read: Homebuyers Prefer This Period For Home Loans

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By Varun Singh

Piramal Realty, the real estate arm of Piramal Group, has introduced a first-of-its-kind 0% interest on home loan scheme for prospective home buyers.

Under the current scheme homebuyers will be able to finance their homes without interest burden until March 2022.

Homebuyers can avail the offer on a first come first serve basis Piramal Realty’s premium projects at Mahalaxmi (Piramal Mahalaxmi), Byculla (Piramal Aranya) and Mulund (Piramal Revanta). 

Under the current offer, consumers can avail an additional pre-booking benefit across select inventory at Piramal Mahalaxmi, Piramal Aranya and Piramal Revanta.

Additional interventions by the government has led to a strong recovery in residential real estate with a growth of 67 percent year-on-year (YoY) over same month last year, boosted by stamp duty cut and the festive period of Diwali.

Commenting on the announcement, Gaurav Sawhney, Chief Operating Officer, Piramal Realty, said, “Finances are one of the critical decision-making aspects for homebuyers, and we aim to ease off their worries through this unique proposition by relieving prospective homebuyers of their interest rate burden. With the reduction in stamp duty, depreciation of Indian Rupee and our offer on home loans at 0% interest this is a perfect time for homebuyers to finalize on their prospective homes.”

“Through this offer, we hope to boost demand amongst homebuyers and are confident that the scheme will attract domestic residents as well as NRIs.”

Gaurav Sawhney, Chief Operating Officer, Piramal Realty

COVID-19 has changed the preferences of individuals emphasizing on the need of owning a home from a reputed developer. Via this scheme, Piramal Realty has envisioned fulfilling the dreams of its homebuyers by customizing and offering one-of-a-kind schemes catering to meet its customer’s needs.

Piramal Realty, the real estate development arm of Piramal Group is one of India’s leading developers with 17 mn sq. ft. of residential and commercial under development in and around Mumbai.

Also Read: Samudra Mahal Flat Sold Below Rs 1 lakh Per Sq. Ft.

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By Varun Singh

Looking to buy a home availing a housing loan then read this minutely. RBI has linked individual housing loans to Loan To Value (LTV) ratio.

On Friday, RBI Governor, Shaktikanta Das made several key announcements while speaking on the Monetary Policy.

RBI, as expected, has kept both the repo rate and reverse repo rates unchanged at 4% and 3.35% respectively.

For individual homebuyers, there’s a big announcement that the governor made.

RBI announced Rationalisation of Risk Weights on Individual Housing Loans.

The Governor said, “Under the extant regulations, differential risk weights are applicable to individual housing loans, based on the size of the loan as well as the loan-to-value ratio (LTV).”

The Governor further added, “In recognition of the role of the real estate sector in generating employment and economic activity, it has been decided to rationalise the risk weights and link them to LTV ratios only for all new housing loans sanctioned up to March 31, 2022.”

“This measure is expected to give a fillip to the real estate sector.”

Shaktikanta Das, Governor 

Experts on the matter claim this announcement will encourage banks to lend more to individual homebuyers without feeling the stress on their balance sheets.

Anuj Puri, Chairman, Anarock Property Consultants said, “On a positive note, RBI’s move to rationalize risk weightage on home loans and linking housing loans risks only to loan-to-value is a welcome move. In the current challenging times, banks have been reluctant to lend owing to risks amidst the pandemic while buyers have remained financially stressed.”

On the linking of housing loans to LTV Dr Niranjan Hiranandani, President (National) NAREDCO and Assocham said, “Particularly this step would benefit borrowers of higher value loans. It would ensure that more credit is available to borrowers.”

“Decision to rejig home loan rules will provide boost to the real estate sector.”

Dr Niranjan Hiranandani, President (National) NAREDCO and Assocham.

Not just luxury, even affordable and mid income housing will also benefit from the announcement.

“RBI’s stand to rationalize risk weightage on home loans is a step in the right direction. Homebuyers in the affordable, mid-income and upper middle-income housing segment will benefit immensely from this move.” Ankush kaul, President (Sales & Marketing) – Ambience Group.

Also Read: MSRDC Plots Worth Rs 15,000 Crore Up For Grabs

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