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Cut off Interest Rate on Home Loan
Cut off Interest Rate on Home Loan.The percentage of principal that is paid as a fee (the interest), over certain period of time, is called the interest rate.
Interest rates are charged specially on loans i.e- Personal loan, Home loan, Car loan and last but not the least Credit cards, every month for a period of time.
Interest rate of home loan have cut down for loan up to 20lakhs.Reducing rates can benefit to some developers in small cities. Whereas in big commercial cities like Mumbai &New Delhi,it is helpless for the developer as the rate cut will not help their existing projects in these metro cities as current prices are way above the loan limit set by banks.
The cut off in interest rate will help a bit by regaining it’s demand for housing loan.
In a conference with CFO of DLF, said that some projects of DLF’s in New Gurgaon and Chennai, which offer homes for about Rs 28 lakh, will benefit in some way due to reduced interest rate.
Because of the huge demand in the Rs 20-25 lakh category and incentives extended by banks, India’s largest listed developer plans to have ‘many’ launches in the forthcoming year in said category.
In the race of developing budget homes, small developers are expecting that large developers would collaborate with them in making budget homes.
Developers are already reducing the size of apartments and offering less facilities to bring down the cost of dwelling unit.
The rate cut is not going to help developer in anyways, because at present, they are not building houses priced close to Rs 20 lakhs.
And, who has the money to purchase cheaper land now to start a new project for cheaper homes?
Before buying a “home sweet home” decision is lean on price, interest rate, sentiment. Prices still need to come down by another 15-20% even in small cities to increase the afford ability.” Home buyers in smaller cities also have a lower income level and, therefore, would buy only when prices come down further.
Therefore, the government’s move is aimed at addressing the need of home buyers mainly in smaller cities besides some metropolitan suburbs.