The Home Loan Interest Rate Trends In India

To own a home is one of the most cherished dreams for most people in India. But, it is not an easy one. You need quite a lot of resources and willingness to take a substantial loan in order to avail it. But, more importantly, you need to be a well-informed borrower. Ignorance is not bliss when it comes to home loans in India. So, you must know common jargon, housing finance regulations and trends. One of the most significant macro-trends in housing finance is home loan interest rates trends. Home loan rates and their trends will dictate right choices for individuals and companies. That’s why here are the top trends that you need to know.

Trend#1 – Floating home loan rates are better

Industry experts recommend floating housing loan interest rates for Indian borrowers. Fixed interest rates are way higher than floating ones. Traditionally, these fluctuating rates are not preferable choice for many. But, there is a significant difference between fixed and floating home loan rates in India. Borrowers can either afford a bigger home or opt for s shorter home loan tenure. That’s why; floating home loan rate is a popular trend in India.

Trend#2 – Housing companies and banks compete for you

With ongoing globalization, there is a crop of small and big housing finance companies in India. Traditionally, nationalised banks and private mortgage companies were lenders available for housing loan borrowers. However, there are a number of options available. This is even better choice as it propels companies to offer more competitive housing loan interest rates. The smarter choice is to use it to your advantage and choose the organization that offers best home loan interest rates. It is hard to suggest a single housing finance company as a lender. But, HFCs like DHFL have much lower home loan eligibility criteria and much better services.

Trend#3 – Home loan interest rates get more transparent

Loans have not been a transparent system in India. But, that phase is long gone. RBI and third party websites have so much more information today. You can easily find out all about repo rates, reverse repo rates and declining benchmark interest rates. It may not interest common borrowers. But, it can be a great value-add that makes the entire system more transparent. Then, you can ask to lower interest rates to your relationship manager.

So, make most of these trends as a potential and existing borrower and you will have a home loan EMI that you can comfortably repay. It may not be a drastic change in home loan rates, but it can be a beneficial one even if you get an offer with 0.25% lesser rates.