Latest Property News on 'Home Loans'

SBI Increases Disbursement of Home Loans to Rs 1,500 cr a month

State Bank of India’s disbursements on home loans under its ‘New happy home loan scheme’ have grown at Rs 1,500 crore monthly. This is about Rs 400 crore more than the monthly average of Rs 1,100 crore it did in the first two months since the scheme was announced. “Till March we had done Rs 2,348 crore. Subsequently we are sanctioning Rs 1,500 crore every month,” P. Nandakumaran, Chief General Manger, Personal Banking, SBI, told Business Line.

In the first week of February, SBI had announced that it will offer an interest rate of 8 per cent for one year - the lowest so far in the industry. In the second year, the rates applicable will be the prevailing rates then. The bank’s move was to stimulate demand in the housing market at a time when many buyers postponed their purchasing decisions amid economic uncertainty and fear of job losses. The scheme has now been extended till September. The bank also offers other schemes, which will be valid till the month-end. Under this, it offers a home loan between Rs 5 and 20 lakh at a fixed interest rate of 9.25 per cent a year for five years, after which rates will be re-set. Read More »

SBI Increases Disbursement of Home Loans to Rs 1,500 cr a month

State Bank of India’s disbursements on home loans under its ‘New happy home loan scheme’ have grown at Rs 1,500 crore monthly. This is about Rs 400 crore more than the monthly average of Rs 1,100 crore it did in the first two months since the scheme was announced. “Till March we had done Rs 2,348 crore. Subsequently we are sanctioning Rs 1,500 crore every month,” P. Nandakumaran, Chief General Manger, Personal Banking, SBI, told Business Line.

In the first week of February, SBI had announced that it will offer an interest rate of 8 per cent for one year - the lowest so far in the industry. In the second year, the rates applicable will be the prevailing rates then. The bank’s move was to stimulate demand in the housing market at a time when many buyers postponed their purchasing decisions amid economic uncertainty and fear of job losses. The scheme has now been extended till September. The bank also offers other schemes, which will be valid till the month-end. Under this, it offers a home loan between Rs 5 and 20 lakh at a fixed interest rate of 9.25 per cent a year for five years, after which rates will be re-set. Read More »

SBI Increases Disbursement of Home Loans to Rs 1,500 cr a month

State Bank of India’s disbursements on home loans under its ‘New happy home loan scheme’ have grown at Rs 1,500 crore monthly. This is about Rs 400 crore more than the monthly average of Rs 1,100 crore it did in the first two months since the scheme was announced. “Till March we had done Rs 2,348 crore. Subsequently we are sanctioning Rs 1,500 crore every month,” P. Nandakumaran, Chief General Manger, Personal Banking, SBI, told Business Line.

In the first week of February, SBI had announced that it will offer an interest rate of 8 per cent for one year - the lowest so far in the industry. In the second year, the rates applicable will be the prevailing rates then. The bank’s move was to stimulate demand in the housing market at a time when many buyers postponed their purchasing decisions amid economic uncertainty and fear of job losses. The scheme has now been extended till September. The bank also offers other schemes, which will be valid till the month-end. Under this, it offers a home loan between Rs 5 and 20 lakh at a fixed interest rate of 9.25 per cent a year for five years, after which rates will be re-set. Read More »

SBI Increases Disbursement of Home Loans to Rs 1,500 cr a month

State Bank of India’s disbursements on home loans under its ‘New happy home loan scheme’ have grown at Rs 1,500 crore monthly. This is about Rs 400 crore more than the monthly average of Rs 1,100 crore it did in the first two months since the scheme was announced. “Till March we had done Rs 2,348 crore. Subsequently we are sanctioning Rs 1,500 crore every month,” P. Nandakumaran, Chief General Manger, Personal Banking, SBI, told Business Line.

In the first week of February, SBI had announced that it will offer an interest rate of 8 per cent for one year - the lowest so far in the industry. In the second year, the rates applicable will be the prevailing rates then. The bank’s move was to stimulate demand in the housing market at a time when many buyers postponed their purchasing decisions amid economic uncertainty and fear of job losses. The scheme has now been extended till September. The bank also offers other schemes, which will be valid till the month-end. Under this, it offers a home loan between Rs 5 and 20 lakh at a fixed interest rate of 9.25 per cent a year for five years, after which rates will be re-set. Read More »

Union Development Minister Favours Cheap Home Loan Rates

In order to revive the demand in the real estate sector, Urban Development Minister Jaipal Reddy today favoured cheaper loans for buying houses. “Real estate is facing a slowdown. So, we should make an arrangement for giving loans at 6.5 per cent for houses in the below Rs 5-lakh category to the poor,” he said after his meeting with Finance Minister Pranab Mukherjee here. “It was a pre-Budget meeting and we discussed budgetary issues with the finance minister,” he told reporters. Reddy suggested extension of housing loan at 7.5 per cent presently available for flats up to Rs 20 lakh to those priced at Rs 30 lakh in cities.

“The revival of real estate is the key for generating employment. The existing 7.5 per cent interest scheme should also be extended beyond June to motivate more buyers,” he said. Reddy sought more budgetary allocations for Commonwealth Games projects, DMRC extension and JNNURM projects. “Keeping the ongoing Games projects in mind, we have sought more budgetary provisions,” he said, adding that more funds for Delhi Metro extension programmes were also sought. “Our JNNURM programme is the most successful one and now, more and more states are seeking projects under the scheme. So we have asked for more budgetary allocations for it,” he said.

Hike expected in Income Tax Exemption on Home Loans

The government is considering a proposal to hike income-tax exemption available for interest payment on home loans to Rs 2.5 lakh a year, to boost demand and rebuild the slowdown-hit housing industry. The ministry of housing and urban development has urged finance minister Pranab Mukherjee to make an announcement to this effect as part of his Budget presentation in early July, a government official said on condition of anonymity.

At present, taxpayers taking housing loans are eligible for income-tax exemption on interest payment of up to Rs 1.5 lakh every year. Besides this, the repayment of principal amount is part of investments eligible for benefit under Section 80(C) of the Income-Tax Act, which has a ceiling of Rs 1 lakh. The government has already identified housing as one of its focus areas, a fact highlighted by President Pratibha Patil in her address to both the houses of Parliament. The existing tax exemption limit is considered inadequate at a time when a two-bedroom house in big cities costs at least Rs 25 lakh. Considering a person takes a loan of Rs 20 lakh at an interest rate of 9.5%, he would pay Rs 1,88,493 towards interest alone in the first year. His annual interest payment in the first five years would be more than Rs 1.5 lakh. Read More »

Public Sector Banks Witness Rise in Home-Loan Defaulters

The rate of default in repaying home loan installments in public sector banks like SBI (State Bank of India) and PNB (Punjab National Bank) has gone up in the past six months as compared to private banks. Offering of these loans on a platter in the last six months so that the buying capacity is enhanced in a market beset with slowdown is believed to be one of the main reasons for the rate of defaults. It is much easier to get off the hook if one has a home loan from a public sector bank rather than a private one, it is believed. Going by the increase in default rate by 4% in the past six months in the city for SBI and PNB, the scare of borrowers not repaying their loans in time has shot up.

According to an official in personal loan department of SBI, who refused to be named, “In Haryana region, in Ambala, default has soared to 7% and in J&K, the figure is 15%. Though we have stopped giving personal loans to the non-salaried, we are working on making scrutiny of home loan applicants more stringent.” At the moment, SBI offers loan up to Rs 5 lakh at a rate of 8.5% per annum. Facing a similar situation in the past six months, PNB has accounted for an increase of 10% defaulters. “There has been a rise of 10% in delinquency. However, we are also witnessing an upward trend in home loan borrowers with 8.5% interest up to Rs 5 lakh on fixed loan,” said retail banking incharge official, PNB, requesting anonymity. Read More »

RBI’s Safe Home Loan Norms Get American Economist’s Admiration

Praising Reserve Bank of India (RBI) for having safer home loan norms, American economist Duglas J Young said India does not have much impact of economic slowdown because of RBI’s safer home loan norms. Economic slowdown’s impact in India is less and banks are survived only because of RBI’s norms in housing loan, Young said while addressing city’s businessmen and professionals at a seminar last night. Indian banks give housing loan 80 per cent which help them to survive dispite discreaing property rates.

Young said India has achieved 9.5 per cent of GDP rate while other countries in the world had the rate between 4.5 to 6 per cent. He, however, expressed fear that Non Resident Indian (NRI) investment in India can be dicreased because NRIs living in Amrecia and European countries are facing the slowdown which forced them to cut short their investmet in India. Young, who is also a proffesor in America’s Montesa Universty had been here for last two days. The seminar was organised jointly by Rajkot Chamber of Commerce and Industry (RCCI) and American Centre, Mumbai.

PSBs Welcome Home Loan Balance Transfers from Private Sector Banks

Home loan ‘balance transfers’ from private sector banks and housing finance companies are welcome, say public sector bankers. While they are dangling the carrot of soft interest rates to encourage customers from other banks and HFCs to make the switch, public sector banks (PSBs) are not letting their guard down in their quest to grow their retail loan book. While some PSBs are aggressively pursuing home loan takeovers, yet others are cautious due to concerns over the quality of assets.

According to public sector bankers, the switch happens when there is a wide interest rate differential on home loans between PSBs and private sector banks/HFCs. On a Rs 30-lakh home loan of 20 years, PSBs are currently charging a floating interest rate of about 9.25 per cent, while select private sector banks/HFCs are quoting an interest rate of 9.75-10.50 per cent. It is this interest rate differential that is prompting home loan customers to gravitate from private sector banks/HFCs to PSBs. A senior IDBI Bank official pointed out that customers would do well to do a through cost-benefit analysis before they go in for balance transfer of their outstanding home loans from one bank to another. The reduction in equated monthly instalments should far outweigh the pre-payment penalty charges (imposed by the old bank) plus the processing fee (imposed by the new bank). Read More »

SBI to cut Interest rates

The country’s largest lender, State Bank of India, today said it will consider a cut in interest rates after the bankers’ meeting with Finance Minister Pranab Mukherjee scheduled for early next month.

“As far as interest rates are concerned, we will take a view after (bankers’ meeting with Finance Minister),” SBI Chairman O P Bhatt said after the launch of Defence Salary Package here.

There is enough liquidity. Credit is not strong at this point of time but it is expected to pick up during the year, he said. “There is definitely a softening bias (on interest rates). There is no chance of going up,” he said, adding that “perhaps they (interest rates) would come down.” Read More »