Good News for Home Loan Borrowers

December 8, 2008	(1 votes, average: 5 out of 5)  Loading ...
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The government today said public sector banks would soon unveil a package for those seeking home loans of up to Rs 20 lakh. “Public sector banks will shortly announce a package for borrowers of home loans in two categories — up to Rs 5 lakh and between Rs 5-20 lakh,” an official statement said, a move that signals cheaper credit for buyers in the low and middle-class segments. The government said there was a large unmet demand for housing, especially among the middle and low-income groups.

It said housing would be kept under “close watch” and promised that additional measures would be taken, as necessary, to promote an accelerated growth trajectory. Housing is an important source of employment and generates demand for critical sectors. Analysts said the demand in the residential segment had declined in the last six months because of high interest rates on loans and a steep rise in property prices in the last two to three years.

The government highlighted the RBI’s decision to provide a refinancing facility of Rs 4,000 crore to the National Housing Bank. To give a fillip to the real estate sector, particularly housing, the RBI had yesterday said that banks could classify housing loans up to Rs 20 lakh as “priority sector” advances, subject to a ceiling of five per cent of their total priority sector target. Loans by banks to housing finance companies for lending to individuals for purchasing or setting up of units may be classified under the priority sector, provided the loans granted do not exceed Rs 20 lakh per unit per family, the RBI had said.

News Published Under:   Home Loans |

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