These banks offer the lowest interest rates on home loans, check the details

Demand for real estate has increased as domestic economic indicators are favorable and the economy appears to be recovering. However, home loans have become more expensive and the high interest rates are having a negative impact on the demand for housing.

Let’s learn more about home loans and the five banks with the lowest annual percentage rate (APR).

Two types of interest rates: fixed and variable

There are two different types of loans that banks offer – fixed and variable. Whenever you apply for a loan, you should first check whether the interest rate is fixed or variable. With the fixed rate arrangement, the interest rate stays the same throughout the life of the loan. For example, if you take out a loan with a fixed interest rate of 8%, that interest rate will remain the same for the duration of the EMI period.

In the case of a floating rate, the level of your EMI changes when the bank’s MCLR changes. For example, if the RBI increases their repo rate, the banks will pass the rate hike on to you and raise your interest rate. Your EMIs will increase as a result.

Banks offer the lowest interest rates on home loans

Private lender HSBC Bank now offers the lowest interest rate on home loans, ranging from 6.85% to 7.5%. Canara Bank home loans have interest rates ranging from 7.05% to 11.85%. Home loans are available from Karur Vysya Bank at interest rates ranging from 7.15 to 9.35 percent. Interest rates starting at 7.2 percent are currently being offered by mortgage lender Bajaj Housing Finance. Bank of Maharashtra home loan interest rates range from 7.30 to 9.45 percent.

The interest rate varies from person to person depending on the borrower’s risk profile, including their CIBIL score, gender, whether they are employed or not, and the size of the loan. Compared to people with lower scores, you pay a lower interest rate if your CIBIL score is excellent. Interest rates will be higher if the loan amount is large.

In early June, the Reserve Bank of India (RBI) raised the benchmark repo rate by 50 basis points (bps), the second hike in less than a month after the Monetary Policy Committee hiked the rate by that amount in May during an off-season. Cycle policy review. Retail inflation was 7.04 percent in May, beating the RBI’s target range of 2 to 6 percent.

As a result, some lenders raised interest rates on both deposits and loans, which in turn made borrowing more expensive. These lenders include ICICI Bank, State Bank of India and HDFC Bank.

Recent repo rate hikes by the RBI and rising interest rates in the country are reportedly having a negative impact on home sales. Sales in seven major cities decreased 15% to 84,930 units in the June quarter of 2022 from 99,550 units in the March quarter of 2022. In the second quarter of 2022, the Mumbai Metropolitan Region (MMR) recorded the largest sales with around 25,785 units, followed by the National Capital Region (NCR) with almost 15,340 units.

According to the report, developers capped new supply in the June quarter of 2022 at 82,150 units, up from 89,150 units in the first quarter of 2022, down 8% over the same period. The only markets where new launches increased are MMR and Pune, where they did so by 26% and 14%, respectively, sequentially.

(Source: News18)

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