In the last week, I have posted an article about the home loans interest rates and I have pointed out the reason why the home loans interest rates would go down in the near term. I expected that this would possible go down only when RBI is reducing the key interest rates related to the monetary policies. But, in the last week two banks has reduced the interest rates without waiting for the RBI’s action. It clearly shows that the banks are stepped into the action of reducing the interest rates. In the coming weeks, we can see the other banks to reduce the interest rates.
Central Bank of India has reduce the home loans rates by 0.25% to 10.75% for the loan tenure of 25 years and under Rs. 30 lacs. In the same way, Bank of Maharashtra (BoM) has reduce the home loans rates by 0.25% to 10.60% for the loan tenure of 5 years and under Rs. 25 lacs. 2011 is very difficult year for the banks. The credit growth has fallen down because of the high interest rates.
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When it comes to buying the homes, please read the following points which would be more useful for you.
- There won’t be any hike in the interest rates in coming months. The current rate on home loans are the highest and can not go further. It will hurt the country’s economic growth which is already impacted by the rates hike.
- If you are looking to buy a new house, this would be the right time. Please get the loan in the floating rates if you would repay within ten years of time.
- If the interest are going down, the home sales would increase. Then there is a chance for the builders to increase the prices of the property.
- Up and Down of the interest rates are normal and it is part of the cyclic nature of the interest rates. So, don’t blindly plan if the rates are down or high for the short term basis. If you are taking a loan for more than 10 years, this up and down will not affect much on your loan amount.
- Wait for the budget till next month if you want to know more about the tax rebate. There are rumors that tax exemption for the home loans would be increased.
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