If you’re looking to buy a home, now is the time! With the unpredictable nature of the pandemic and the subsequent financial doldrums, most of us have put big-ticket purchases (such as buying a home) on the backburner. However, that may not be the most prudent thing to do!
With home loan interest rates at an all time low, now could be the best time to finally hit that goal of owning a house. In addition to the low interest rates, home loan eligibility has also improved currently as banks and financial institutions are easing funding criteria to fit in as many buyers as possible.
What the Market says:
Statistically, the current home loan rates are the lowest in four decades and are expected to stay that way for at least six to twelve months. For end users, who want to buy homes for themselves or for investors looking to capitalize on low real estate prices, this presents a great opportunity.
Low Rates Equal Huge Savings:
When taking a home loan for the first time or getting it refinanced from another lender, even 1% can make a massive difference. For instance, if you take a loan of Rs. 45 lakhs for a tenure of 15 years, a difference of 100 basis points (or 1% interest margin), can help you save as much as Rs. 5 lakhs.
Similarly, even if home loan interest rates increase in the future, the burden will be considerably lower than if you had borrowed funds at a higher rate in the first place. Either way, it is a win-win proposition for a home buyer.
What the Experts Have to Say:
Industry-level experts are in favor of the trend and are only expecting more and more home buyers to capitalize on the current scenario. Commenting on this, Pritam Chivukula, Co-Founder and Director, Tridhaatu Realty (Secretary CREDAI-MCHI), told media that the buying opportunity for homebuyers has been extended due to the reduction in home loan interest rates by prominent banks. He further added that at present, home loan interest rates are at an all time low, the lowest it’s been in nearly 15 years. This scenario is likely to continue for a while and it’s unlikely that the rates will go down any further from their present level.
Remarking similarly on the need for financial institutions to up their game, Ashok Mohanani, President, NAREDCO Maharashtra, told media that especially in these unprecedented COVID-19 pandemic times, there is a growing desire among consumers to own homes. It’s looked at as more of a necessity and so, there’s immense competition amongst financial institutions to provide the best rate of interest.
The low home loan interest rate regime is also expected to bring in a flurry of positive economic changes. To this effect, experts say that low interest rates pave the way for enhanced consumption and as a result, the country can see massive economic growth. Furthermore, they add that nil transaction costs along with low interest will reflect positively in the affordable housing sector and ready-to-move-in homes. These two groups will see immense benefits due to the reduction in rates.
With some institutions offering interest rates starting at just 6.7%, home buyers now have a once-in-a-lifetime chance to own a home at lucrative prices. In addition, customers can also benefit from low processing fees, foreclosure charges, and a range of other discounts. Take this opportunity and turn it into something lucrative.