|
|
Real Estate News |
Increasing home loan rates affect real estate market
In the previous one month (July), following the Reserve Bank of India’s new rule pronouncements with an aim to control increase, interest rates on home loan have gone up by one to 1.5 percentage points from around 10.5% per annum to 12% per annum This is a very sudden hike and has resulted in an increase in EMI by around 10% - or Rs 102 per Rs 1 lakh loan for 20 years. The EMI for Rs 20 lakh loan for 20 years has gone up from Rs 19,633 to Rs 21,675 - a whopping Rs 2,042 jump.
Hike in lending rates joined with already existing price rises will have an effect on those customers, who were forecast to buy a residential property. Because of inflation , their capability to have a loan of and repay has already been affected. With home loan interest rising further, they will just drop their plan to buy a home at this point of time.
The interest rates may additional go up by at least half a percentage point to over 12% in October at what time the RBI reviews its credit policy. The main cause in raising the interest rate is the current high price rises, which is hovering around 12%. As chances of inflation coming down by December are very low, banking sources said RBI would further tighten the money supply to kill the inflationary expectation.
|
| |
|
|
