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

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

The Reserve Bank of India (RBI) in its October 2021 bi-monthly meeting of the Monetary Policy Committee kept the repo rate unchanged at 4 per cent. The home loan and car loan borrowers paying EMIs based on the flexible interest rate will continue paying almost the same rate of interest as applicable to them currently. Most banks are currently offering home loans starting at an interest rate of around 6.5 per cent. For those looking to get a home loan to buy their home, the interest rate environment appears conducive for them.

“For homebuyers, the low home loan interest rates regime will continue in the market and help foster housing demand during the ongoing festive season. Notably, this is a period when housing sales usually surge on the back of attractive offers by developers and lending banks. The green shoots of economic revival coupled with the prevailing low interest rates will be conducive for the residential sector in the short to mid-term. ANAROCK Research indicates that we may see at least 10-15% growth in housing demand in the ongoing festive period (Oct.-Dec) across the top 7 cities against the preceding quarter. In Q3 2021, the top 7 cities saw total housing sales of nearly 62,800 units – already the best quarterly sales since the pandemic” says Anuj Puri, Chairman – ANAROCK Group.
Most leading banks are already offering low interest rates for new takers of home loans. For most banks, the fresh home loans are based on the bank’s Repo Linked Lending Rate (RLLR), also referred to as an external benchmark rate (EBR). The banks, however, may not offer loans on their RLLR but depending on the loan amount and other factors, the effective rate may differ. On an average, for the majority of borrowers based on the loan amount, profession, gender etc, the home loan interest rate is 7 per cent or even higher across most banks.

“We welcome RBI’s status quo on policy rates. This will mean a continuation of low home loan rates, which will keep the demand momentum for homes going. In the past couple of months, we have witnessed further reduction in interest rates of home loans to 6.5% per annum by leading financial institutions,” says Amit Goyal, CEO, India Sotheby’s International Realty.