Home Loan Interest Rate Trends In India

This is a very generic housing finance topic. These trends about home loan rates, though applicable to entire housing finance industry, may or may affect a specific housing finance company’s decisions. So, take these insights with a grain of salt because you will need to exercise caution while understanding its implications for your home loan.

HFC vs. PSB:

Housing finance companies (HFC) in India and Public sector banks (PSB) offer home loans. It may seem like a same product. But, there is a vast difference between the two. Firstly, housingfinance eligibility standards of PSBs are far more stringent. Secondly, housing finance companies offer more flexible home loan packaging in terms of repayment options, mode of payment, etc. These differences affect home loan rates and choice of lender. In other words, when principal amount for home loan is low, PSBs seem like a well-liked choice. However, for housing finance for more than Rs. 25 lakhs, housing finance companies are the preferred. Though, some finance companies have a higher home loan interest rates brackets than others, HFCs are the still a popular choice.

Fixed vs. Floating:

There are three types of home loan rates in India – fixed, floating and hybrid. Floating home loan rates are popular in India right now. Most Indian borrowers prefer the stability of fixed interest rates. But many opt for floating one because lower interest rates are preferred choice of the masses. Borrowers have very tight budgets to afford the luxury of fixed rates in current global and local economy.

Downward housing loan interest rates:

Take a look at generic announcements from banks and housing finance companies. General trend is to attract more customers by offering lower housing loan interest rates. Primary reasons for this trend are real estate sector, current local and global economy and job market. There is no reason to miss out on this trend. If you can qualify for a home loan, make most of these dropping real estate prices and housing loan interest rates.

Take a look at any finance blog or responsible finance news portal. You will discover that these home loan rate trends dictate the housing loan market. But, every organization uses this market scenario differently to their advantage. Therefore, you need to select a lender that will offer you stability and lowest interest rates in current economy. These are really important factors affecting your home loan and monthly cash flow today. If you can get a home loan with well-defined repayment plan and low home loan rates then you will get the best deal possible in today’s scenario.