As the real estate market in India is witnessing an uptick in activity, which is reflected in home sales and property registration, home loans are what home buyers look to for finances when buying a new housing unit. Home loan interest rates can vary based on the borrower’s risk profile, gender, and the amount of the loan requested. These can also differ per bank. Here are the interest rates offered by various lenders, including HDFC, State Bank of India (SBI), Union Bank of India, and Kotak Mahindra Bank:
India’s largest mortgage lender HDFC, which is merging with HDFC Bank, offers home loans at an interest rate range of 7.15-8.05. The rate variation depends on the risk profile of borrowers, such as CIBIL score, gender and loan amount. If you have an excellent CIBIL score, you will get a lower interest rate than those with lower scores. It also applies: the higher the amount of the loan, the higher the interest.
These home loan interest rates apply to loans under HDFC’s adjustable-rate home loan scheme and are subject to change at the time of payout.
The country’s largest lender, the State Bank of India (SBI), offers 7-7.6 percent interest on home loans. In addition to gender, the bank also has separate interest rates for ready-to-move-in properties.
Union Bank of India currently offers an interest rate of 6.9 to 8.6 percent, depending on salaried and non-salaried borrowers, except for gender. Private lender Kotak Mahindra Bank offers 6.55-7.6 percent interest rates on home loans. Aside from these interest rates, the lender also charges GST and processing fees, which can be around 0.5 percent.
As the RBI has raised key policy rates to contain high inflation, lenders have recently increased their interest rates on both deposits and loans.
Real estate market recovers
According to a report by real estate consultancy CBRE South Asia, home sales rose nearly 13 percent quarter-on-quarter to more than 70,000 units in the March 2022 quarter, with sales rebounding significantly at about 40 percent year-on-year.
“Affordable/budget segment market share in sales remained stable at 27 percent in the first quarter of 2022 compared to the fourth quarter of 2021. While sales in the more expensive category rose to 23 percent in the first quarter of 2022, against 16 percent in the fourth quarter of 2022, those in the mid-market fell to 41 percent this quarter. The premium and luxury residential segments also witnessed a slight increase in sales based on QoQ,” the report said.
India Ratings has said momentum is expected to continue into 2022-23 due to strong demand, and home sales could rise about 12 percent year-on-year in the current fiscal year.
According to a report by property consultant Knight Frank India, the major city of Mumbai saw a 78 percent increase in May property sales to 9,523 units, the best in a decade. According to the report, it contributed more than Rs 709 crore to the state revenue. Half of the registrations fell in the price range of Rs 1 crore and above, while the apartment size between 500 and 1,000 square meters was most preferred among buyers.
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