RBI keeps key rates unchanged! These banks offering home loans at multi-year low interest rates

 The Reserve Bank of India (RBI) held the repo rate at 4% at its bi-monthly Monetary Policy Committee meeting in October 2021. Borrowers of home loans and car loans who pay EMIs based on the flexible interest rate will continue to pay nearly the same rate of interest as before. The majority of banks are currently offering home loans with interest rates starting at roughly 6.5 percent. The interest rate climate appears to be favourable for consumers seeking a home loan to purchase a property.

"The low house loan interest rate regime will continue in the market for homebuyers, helping to boost housing demand over the current holiday season." Notably, this is a time when home sales typically increase as a result of enticing offers from developers and financing institutions. In the short to medium term, the residential sector will benefit from the early signs of economic recovery, as well as the current low loan rates. According to ANAROCK Research, housing demand in the top 7 cities is expected to increase by at least 10-15% in the current festive season (October-December) compared to the previous quarter. "Total housing sales in the top seven cities reached approximately 62,800 units in Q3 2021, already the strongest quarterly sales since the pandemic," says Anuj Puri, Chairman of the ANAROCK Group.

The majority of major banks are currently offering low interest rates to new home loan borrowers. Most banks base their new home loans on their Repo Linked Lending Rate (RLLR), often known as an external benchmark rate (EBR). Banks, on the other hand, may not give loans based on their RLLR, but the effective rate may vary depending on the loan size and other conditions. The typical house loan interest rate is 7% or even higher for the majority of borrowers, depending on the loan size, career, gender, and other factors.

"We applaud the RBI's policy rate stability. This will result in continued low house loan rates, which will keep the housing demand trend going. Leading financial institutions have reduced home loan interest rates to 6.5 percent per annum in the last few months, according to Amit Goyal, CEO of India Sotheby's International Realty.

SBI, LIC Housing Finance, Bank of Baroda, ICICI and HDFC, Kotak Mahindra Bank, and others are some of the banks that a new borrower could look at for the best house loan interest rate.

"Recently, home loan interest rates have dropped significantly and are now at an all-time low, but property prices have remained consistent. Few banks have lately reduced borrowing rates, which is promising and will pave the way for continued strong house demand. "We are witnessing a number of first-time home buyers who were unable to make a choice in prior quarters owing to the lockdown who are keen to close the sale now," says Ramani Sastri, Chairman and CEO of Sterling Developers.

Bank of Baroda has reduced its house loan rates by 25 basis points from 6.75 percent to 6.50 percent, effective October 7, 2021, and will be accessible until December 31, 2021 with no processing costs.

For loans up to Rs 2 crore, LIC Housing Finance has extended its lowest home loan rates of 6.66 percent to all borrowers with a CIBIL score of 700 or above, regardless of whether they are salaried or professional/self-employed. The offer is valid for loans approved between September 22nd and November 30th, 2021. For loans up to Rs 2 crore, the processing cost is capped at Rs 10,000 or 0.25 percent of the loan amount, whichever is lower.

On loans taken out until November 8, 2021, Kotak Mahindra Bank has decreased its home loan interest rates by 15 basis points (bps) from 6.65 percent to 6.50 percent per year. All new house loans, as well as refinanced or balance transfer loans from other banks, will be subject to the Kotak Bank Home Loan interest rate, which starts at 6.5 percent.

Regardless of the loan amount, SBI is offering credit score connected house loans at just 6.70 percent. This rate of interest also applies to balance transfers. For house loan borrowers, the Bank is waiving processing fees as well as the waiver of occupation-linked interest premiums.

HDFC, the country's largest mortgage lender, is offering house loans with interest rates starting at 6.70 percent for all loan types and consumers with credit scores of 800 or higher. HDFC Home Loans are available starting at 6.70 percent per annum until October 31. The offer is valid for all new loan applicants, regardless of loan size or employment status.

Since October 1, 2019, the RBI has required banks to offer retail loans, like as home and vehicle loans, that are tied to an external benchmark, most commonly the RBI repo rate. When the RBI changes the repo rate, the change in the interest rate in RLLR is more faster for the borrower than in MCLR-linked loans. From April 2016, the MCLR (Marginal Cost of Funds-based Lending Rate) was implemented. The MCLR is dependent on the bank's own cost of funds, among other things.

Even borrowers who pay EMIs based on the MCLR may see a change in their monthly instalments when their reset date arrives. If you have a loan with a Marginal Cost of Funds based Lending Rate (MCLR), a drop in the MCLR will allow you to pay reduced EMIs on your loan when your reset period comes around. Some banks, like Canara Bank and Punjab National Bank, have lately cut their MCLR.

Existing borrowers who took a loan before October 1, 2019, may keep their loans tied to the Marginal Cost of Funds based Lending Rate (MCLR) rather than switching to the Repo Linked Lending Rate (RLLR). It is possible to convert MCLR loans to RLLR, but this should be done after a thorough cost-benefit analysis. This may come at a cost, so think about the loan's remaining term before proceeding. Before making the changeover, one should wait a few months to gain a good image of interest rate movement.

Choose a lender that offers a cheap interest rate based on your financial situation. Depending on the remaining term of the loan, even a 100 basis point reduction can save you a few lakh in interest costs. If a home loan of Rs 40 lakh is taken out for 15 years, the EMI and interest savings (based on a 200 basis point reduction) will be:

Rs 4163 in EMIs saved ( Annually Rs 49,956)

7.49 lakh rupees in interest saved

Prepaying principal at regular intervals is another strategy to keep the interest cost low. Prepaying every six months or once a year is preferable because the outstanding principle amount is reduced considerably sooner. Any such prepayments should ideally be made early in the loan's life cycle, as interest costs are higher in the first few years. You can use a home loan repayment calculator to figure out how much money you'll save.

New home loan borrowers

New borrowers should contact a few different banks and inquire about the effective home loan interest rate based on their loan size and term. Borrowers paying EMI on loans tied to the RLLR will be impacted significantly faster than those paying EMI on loans connected to the MCLR if the repo rate rises. As a result, whether you have an MCLR or RLLR house loan, keep a prepayment plan on hand to pay off the loan as quickly as feasible. The lesser your interest burden will be the sooner you repay the loan.

Conclusion

There's no need to be discouraged if your personal loan application is turned down. To boost your chances of loan approval, simply work on improving your credit report and following the methods outlined above. Once you've completed this checklist, you're ready to submit your personal loan application.To find about the best pricing and deals, call our toll-free number +91-9477079053. They'll help you in every way they can. Please contact me at Best Home Loan In India if you have any more.