If you are planning to take a home loan, this is a favourable time to take the plunge. But do remember to have a repayment plan in place to avoid any financial stress later.
Home loan interest rates are trending at an all-time low with rates starting at as low as 6.4%. The Reserve Bank of India’s decision to pause key rates for over a year now has also contributed to concessional rates being offered to customers. This is because many banks have benchmarked their lending rates to the RBI’s repo rate after October 2019. Those banks that have not linked their lending rates to repo rates are also offering low rates to stay competitive.
Besides, many banks across the country have also rolled out festive season home loan offers to attract prospective borrowers. Many popular private and public sector banks are offering other festive offers as well such as waiving off processing fees or doing away with the distinction of rates for salaried and non-salaried. This makes it a great time to opt for a home loan.
Existing home loan borrowers can also make use of this low interest rate regime and switch to banks offering lower rates. That being said, it is important to note that banks have linked their festive offers with a borrower’s credit profile. So, if your credit score is below 650, you may find it difficult to get a loan. For instance, a prominent public sector bank has announced that borrowers with a credit score above 800 can get home loans at a 6.7 per cent interest rate, according to BankBazaar.
There are more than 20 banks and housing finance companies that are offering loans under 7 per cent currently. So, if you are planning to take a home loan, this is a favourable time to take the plunge. But do remember to have a repayment plan in place to avoid any financial stress later.
If already servicing a home loan and are in the early phase of the tenure, you may consider refinancing and switching to a lower rate to reduce your interest payment burden. But before doing so, do your maths about final savings as refinancing comes with a set of costs such as foreclosure charges, mortgage deed fees, processing fees, etc.
If you are planning to take a home loan, the table below provides a list of banks and housing finance companies — including SBI, HDFC, ICICI Bank, Axis Bank, PNB, and LIC HFC — that are offering home loans below 7% for amount under Rs 30 lakh.
Do note that the interest rate applicable to you could be higher depending on your age, gender, income, credit score, loan amount, property value, LTV ratio or any other terms and conditions laid down by your lender.
