Home loan interest rates are at a historic low. This coupled with benefits offered by Pradhan Mantri Awas Yojana (PMAY), piled up inventory and attractive schemes by developers have made it the right time to buy a house, especially for self-occupation.
Consider this: India’s largest bank State Bank of India (SBI) on March 1 offered interest concession of up to 70 basis points (bps) on home loans based on credit score and the loan amount. SBI home loan rate starts from 6.70% for loans up to Rs 75 lakh and 6.75% for loans above Rs 75 lakh. Women borrowers get a special concession of 5 bps. The offer is valid until March 31, 2021.
Since the outbreak of pandemic, banks are flush with liquidity over the last one year. Because of huge volatility in the stock markets, there was a huge inflow into bank fixed deposits in 2020. Moreover, the new on-tap Targeted Long-Term Repo Operations (TLTRO) announced by the RBI allowed banks since October to borrow at low costs and lend to corporates in specific sectors including real estate. Shetty said, “The move ensures that bank will have adequate low-cost funds for lending. So even though there has been no reduction in the repo rates, banks do have margin to reduce rates.”
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