Latest Property News on 'Home Loans'

Housing Sector Affected by Rising Home Loan Rates

The housing sector has been severely affected by rising home loan rates. The sector has witnessed a massive fall of 26.6 per cent in 2006-07 from 29.1 per cent in 2005-06 and is expected to slow down further to touch between 17 and 20 per cent in the current fiscal.

In a study named ‘Impact of rising home loan rates’, by ASSOCHAM revealed the fact. The study also points out that the real estate market has already seen a drop of 60 per cent in sales. Its impact could further worsen if reversal in rising interest rates for housing is not addressed urgently. Read More »

India’s Home Loan GDP Ratio Stagnates at Just 5%!!!

Despite Indian real estate undergoing a paradigm shift, India’s home loan GDP ratio stuck at just 5% as against 50% in the US and UK.

90% of home loan borrowers in India are first time buyers. Interest rates on home loan have sharply risen from 7% in 2003 to 12% in 2007, with its impact largely following across the board including genuine home buyers, industry watchers, builders, and bankers.

A borrower of Rs 10 lakh with loan tenure of 20 years would have to shell out an extra of Rs 3250 every month on his EMI and annual additional burden would be as high as Rs 39,000 and loans up to Rs 20 lakh form 80% of the total housing loan portfolio. Read More »

Banks Prune Home Loan Rates

Interested home loan buyers do not need to be afraid of interest rates anymore and can pick their dream house soon. Since the banks are seeing large investments, the rates are finally falling after nearly three years.

HDFC Ltd. has already cut its floating interest rates by a quarter a percentage point (0.25%) to 11% under its special monsoon offer. The bank has also lowered its processing fee. Following in footsteps is Bank of Baroda. It has recently trimmed its rate by 50 basis points to 11% for loans up to Rs 20 lakh and 11.25% on home loans above Rs 20 lakh. Read More »

Home Loan Demand Falls by 15-20%

A steady increase in home loan interest rates have pulled home loans disbursement by 15-20% in first three months of the current year. The heat of soaring property prices as well as loans can easily be felt in metros and tier-I cities.

Home loans disbursement stood at Rs 50,600 crore in 2006, an increase of 30% over the previous year. Read More »

ICICI Bank Cuts Home Loan Rates

In an effort to control its falling home loan disbursements, ICICI Bank recently snipped its interest rates on home loans by 50 basis points. The reductions will be applied to all loans below Rs 20 lakh.

The institution has decided to cut on rates following a decision by the Reserve Bank of India (RBI) to allow render more weightage to home loans up to Rs 20 lakh. Clearly, an increase in home loans can help the bank meet its sector obligations, says a bank official. Read More »

Home Loans to Be the Best Saviors In Future

The story of rising interest rates on home loans is not new to ears of home buyers in India. Seeing the sector devoid of prospective customers nowadays, the government is encouraging people to invest in housing, complying with the policy initiatives being considered in the new direct tax code.

The code is likely to be a new substitute for prevailing income tax law.  The government is considering continuing some of the tax breaks given to individuals who buy home loans for building houses as ‘social welfare’ measure. Read More »

Banks’ Lending Rate Goes Down

Banks’ lending growth rate is going down due to the relentless fall in retail credit. It has been marked at 24.6 per cent on June 22, 2007, while foreign direct investments are soaring high.

Rising foreign exchange and declining retail credit has created a tense situation for banks in India. Both the entities have converged for the first time in a time span of over three years. Credit dropped by 100 points whereas deposits swelled by an identical margin. Read More »

Securitization of Home Loan Falls

Banks are running short of sources to raise funds.  Securitization of home loan portfolio has witnessed a sharp fall and dropped to a third of previous years’ level, says the data showcased by rating agency Icra.

In 2006, securitization was estimated to stand at Rs 5,000 crore whereas it is Rs 1,600 crore in 2007. Read More »

Home Loans to Secure Over Earthquake Resistant Structures Only, says NDMA

Now, people borrowing home loans will have to ensure their home to be earthquake resistant, as per the new guidelines released by the National Disaster Management Authority (NDMA). Such a decision has been taken by the authority to strengthen collateral security. It will also prevent the borrower against parking fund into substandard properties.

Banks have been asked to consider the fulfillment of seismic safety before lending home loan for construction of multistoried buildings. NDMA has already sent copies containing new guidelines to the Ministry of Finance (MoF), which will forward it to the Reserve Bank of India for insurance. Read More »

Banks Inclining More Towards Personal Loans

Banks are fast shifting their focus from secured loans to unsecured loans in the wake of stringent liquidity conditions. Credit cards and other personal loans fall under the category of unsecured loans whereas the home improvement loans are secured loan as they are provided against the borrower’s valuable possession.

Since January, a sharp fall has been observed in number of customers for home loans. But bankers feel confident about potential of unsecured personal loans. The slump in home loan customer acquisition is attributed to banks no longer pushing home loans forcefully. Read More »