• Login/Sign Up
  • Request a Call Back

    Falling Home Loan Interest Rate and Its Impact on Real Estate Investors

    • 5 min read
    • Last Modified Date: July 3, 2023
    Listen to the article
    facebook twitter linkdin whatsapp

    It is crucial to have our own home in this period of insecurity, providing incomparable financial stability.

    With more NBFC banks jumping on the low home loan bandwagon, real estate companies forecast a new booming holiday season, while some are concerned about lower rates. HDFC had announced the latest sub-7 percent house loans applicable to all new disbursement applications up to the end of October, regardless of the applicant’s credit level or work category.

    Also read: RBI announces record low- Interest rates for the 7th time!

    Reduced interest rate and its impact on the real estate sector

    It follows (SBI), Kotak Mahindra, Bank of Baroda, Maharashtra Bank, and other state-owned, private-owned banks and other large cooperative banks which have used adequate market liquidity, driven by low-interest rates maintained by RBI. The active policy of banks, following a spate of risky corporate loans, shifts their focus towards retail loans, also works for the benefit of customers.

    However, certain banks and NBFCs, like HDFC, are associating individual credit ratings with the special seasonal rate, expressing unhappiness, particularly with the epidemic affecting payback plans of many immobile participants.

    In the next months, the drop in domestic lending rates such as 6.6% or 6.7% is certainly a major booster for the market. However, the availability of these rates is practically blocked by certain people seeking a customer credit score of 800 or higher, since the pandemic resulted in many defaults. Credai’s recent research has shown strong growth in property sales in Pune this year.

    Since the outbreak of the Ebola pandemic in West Africa, many people have returned to their hometowns in tier-2 or tier-3 and then invest in a residential property. The price of properties (both residential and trade properties) has been unchanged or declining in several parts of the country. When ‘work from home is increasingly becoming ‘new standard.

    In these uncertain and difficult times, it is a great decision for anyone to buy a new home or property of any sort. Other significant criteria, such as location, location, present conditions (whether or not ready to move), and RERA approval, need to be taken into account when you buy a house and/or invest in real estate.

    How are home loan rates helpful for investors?

    The lowering of home loan rates is a near-risk free bet for loans (banks and/or financial institutions), as it includes significant collusion with the recipient’s house. Historically, one of the principal reasons for this is to encourage the buyer and to re-engineer consumer trust. Even a minute’s reduction (of 1% or less) in their home loan rate and the EMIs may affect the decision to purchase a new house or property. Some banks also give concessions or waivers to processing fees, and other developers offer discounts and real estate deals.

    Most likely, the rates on house loans will continue to be low at least for the current financial year. This is because house loan rates are already low and it is unlikely that the RBI will further decrease repo rates in the midst and beyond the ‘second wave of the epidemic’.

    It’s been one dream for most people in their whole life cycle to buy or build a house. People take their housing loans interest rate carefully because it affects the home’s final expense and the EMI outgoing. They prefer high-value lending for lengthy tenures, which might lead even to large savings or undesired costs if the interest rate is small. With the ongoing pandemic, the RBI has taken efforts of reducing home loan interest rates to improve investment rates in the real estate sector. As a result of this, Credai’s recent research has reported strong growth in property sales in Pune this year. Assetmonk is India’s fast-growing internet platform for investing in cities like Hyderabad, Chennai, and Bangalore. We provide 14-21 percent IRR properties.

    FAQ’S

    What is the home loan interest rate?

    The interest rate on a house loan is the percentage of the capital amount the lender charges the borrower with the capital sum. Your home credit will be determined by the interest rate charged by banks and non-financial organizations. So the interest rate levied decides how much you pay your lender for your loan every month (equated monthly installment). Interest rates are frequently associated with repo rates and may vary from loan to loan.

    What are the current home loan interest rates?

    SBI has highlighted that, as of 1 April 2021, the old interest rate starting at 6.95% was restored and, like this, the interest rates of the bank on loans at home were not upgraded.

    Related Articles

    6 Reasons Why Investing In Fractional Property Ownership Is The Best Retirement Plan

    6 Reasons Why Investing In Fractional Property Ownership Is The Best Retirement Plan The internal rate of return (IRR) on fractional assets ranges from 13 to 20 percent, which is greater than most retirement plans. Share on facebook Share on twitter Share on linkedin While there are numerous passive income sources and retirement corpuses, investing properly is the key. Commercial real estate (CRE) fractional ownership is one such asset class that offers an ideal opportunity when analyzing a long-term and reliable investment. In combination with a sound investment plan, commercial real estate (CRE) can be a reliable asset class that provides capital security, regular income (often between 10 and 12 percent), and portfolio diversification, all while reducing possible risks. This article will address all your concerns regarding fractional ownership for senior citizen investors.  Understanding fractional ownership In the world of investment, commercial real estate has long been a closely guarded secret. In comparison to other solid asset classes, it has…

    Read more

    What Is Commercial Real Estate Crowdfunding In India?

    Commercial real estate crowdfunding is a modern-day investment idea. Going beyond the opaque and relatively old-fashioned real estate investments of the past, crowdfunding offers pocket-friendly and lesser time-consuming investment options to all individual investors. Here is how.

    Read more

    Fractional Ownership And Its Impact On Commercial Real Estate

    The emergence of fractional ownership in India was a ray of hope to many investors during the onset of COVID-19. The idea of fractional ownership aims at providing a fair chance of investment in mega commercial projects to all investors, which can impact the real estate sector as we know it today.

    Read more

    Fractional Property Ownership vs. Timeshare- Where Should You Invest Your Money?

    Fractional Property Ownership vs. Timeshare- Where Should You Invest Your Money? People can take advantage of a vacation home’s amenities and services through timeshares and fractional ownership. Through this article, let’s discuss how they are different. Share on facebook Share on twitter Share on linkedin Fractional property ownership and timeshares are similar in the real estate industry. The only similarity is the joint ownership of property. Traditional timeshares provide you with the right to utilize the property, but not a deeded stake in the property itself. Owners of some timeshares are offered points that can be used at other properties managed by the same firm. The cost of a timeshare depends on how many points you buy. The key distinction between fractional ownership and a timeshare is the distribution of actual equity. In a fractional ownership arrangement, the buyer owns a portion of the property’s equity. If the value of the property rises, the fractional owner’s piece of the pie…

    Read more

    Curious About Fractional Property Ownership? Here Are The Essential Legal Facts

    Curious About Fractional Property Ownership? Here Are The Essential Legal Facts Real estate fractional ownership is growing in popularity, which means new investment options will become available to small-scale investors. Share on facebook Share on twitter Share on linkedin Unknown in India until recently, fractional property ownership is the practice of owning a piece of property fractionally among a group of individuals. A fractional ownership scheme is one in which all participants own a share of the asset and can profit from changes in the asset’s value. Each fractional owner often owns a portion or share of the property and is listed as an owner on the title and deed. However, in some circumstances, a co-owner will only be able to use the property on certain days, weeks, or months. In other cases, the usage agreements will be specified in a separate document. When it comes to specific co-ownership agreements, several contracts can be used to specify usage rights and…

    Read more

    Fraction ownership: A Minimum investment maximum benefit opportunity

    Only a small number of Indians are investing in residential and commercial buildings that pay rent to optimize their returns on investment. Amidst stock market volatility and low-interest rates on fixed deposits (FDs), we have noticed a spike in individuals buying high-value assets (commercial real estate or luxury villa). Following that, investors share both the revenue and expenses associated with it in proportion to their investment. We are witnessing the creation of a new asset class known as fractional ownership, in which numerous unrelated investors pool their resources to collectively own a high-value asset. This not only lowers the entrance cost for prospective investors but also provides them with all of the benefits of owning the asset without the need for large amounts of money upfront. With fractional ownership, investors share the advantages with co-investors while also reducing the risk of ownership. How does it work? A property’s structure is determined by its size, tenure, and several players. If a…

    Read more

    Real Estate Trends 2021: How Will The Festive Season In COVID-19 Impact The Industry?

    The pandemic has forced many businesses to adopt work from home for their employees, which made people rethink their rental obligations towards commercial office spaces and other investments.  On multiple occasions, tenants who were unable to pay the rent left their landlords in jeopardy. This is making them restructure their leases.  As commercial tenants opt for negotiating their leases, lease restructuring ideas are becoming innovative to ensure profit for both parties.  What is a Commercial Lease? A commercial lease is a formal renting agreement of a building, property, or SVP for commercial or business use. There are several restructuring options to retain tenants and attract new ones.  Some of the creative approaches taken by developers include: Rent abatement  It wouldn’t be practical or even feasible for landlords to reduce their rents. The solution to this is giving respites and also going so far as offering a longer initial rent-free period to their tenants.  Blend or extend In cases where tenants…

    Read more

    Fractional Ownership In Indian Real Estate: What Is The Big Picture?

    In India, real estate property is the single most desired investment for all, we tend to save up our lifetime’s worth of fortune for the one fine day when we can finally afford our dream property. This is not just a very big dream but it is also a very impractical and outdated way of using your hard-earned money. Fractional ownership in real estate is a modern-day investment idea wherein investors can invest an affordable and pocket-friendly amount of money to become owners of high-end properties. It is slowly gaining popularity as the modern real estate investment model. What does fractional ownership mean in real estate? Why is it gaining popularity? Fractional ownership of real estate is an investment model where a group of investors comes together to pool their assets to raise funds for purchasing real estate property together. Each investor becomes a fractional owner of the property. It is the ideal form of investment because all investors share…

    Read more

    Fractional Ownership: The Intelligent Way of Owning Property In Modern Times!

    Among the endless alternatives of investing money, ownership of property is renowned as a reliable, long-term investment option. It offers good returns for investment while generating wealth through appreciation of assets, land shortages, and high demand. Asset ownership contributes to income and wealth generation. However, the ownership of assets has radically transformed over the last several years as the business models have been changing constantly. One of the most important examples could include the fact that timeshares are not the only part of the ownership of the investor.  Fractional property ownership is a novel way to obtain a property that you have been looking for Here’s everything you need to know about fractional ownership. Understanding fractional ownership  Because of the high price, many Indians find it difficult to invest in commercial property. Most of them focus primarily on the residential real estate industry. However, access to commercial real estate (CRE) will become easier for investors with the advent of fractional…

    Read more

    Do You Want to Save Tax on Your Short-Term Investment? Here’s What You Should Do!

    More often than not, financial planning is about long-term investing. However, several immediate demands must be handled. People invest for shorter periods because their objective is approaching or they do not want to risk locking their money in for a longer period. Short-term investments can last anywhere from seven days to less than a year, and there is no predetermined time limit. You can choose from a number of products if you want to invest in the short term. These products can be divided into two groups: those that provide fixed income and those that provide market-linked returns. Fixed-income investments are available with terms ranging from 7 to 12 months. Market-linked products are debt mutual fund schemes with underlying assets that have an average tenure of fewer than 12 months. This article will provide you a list of short-term investment options to save tax.  Advantages of the short term investment  Assets that can be converted into cash or sold in…

    Read more

    Real estate or Stock Market? Everything You Need to Know to Make an Informed Choice!

    We’ve heard arguments throughout the years about which is a better investment: real estate or stocks. Both have advantages and downsides, and various characteristics distinguish them as distinct investments in their own right. To make money with either investment, you must first grasp the benefits and drawbacks of each. They all provide returns on your money, but for different reasons. Their risk factors are also varied. Should you invest in either one or both? Let’s find an answer to that question by comparing the dangers and benefits of investing in real estate vs. stocks. Real estate vs. stock- an overview of the Indian investment market When you invest in real estate, you are acquiring an actual piece of property. Regardless of the form of real estate investment, most investors profit from monthly rental revenue and/or when the property is sold for a higher price. When you buy stock, on the other hand, you’re buying a portion of a corporation. As…

    Read more

    Evaluating Your Crowdfunding Real Estate Investment – A brief guide

    Crowdfunding real estate investments have rapidly become popular among investors from all backgrounds.  Yet, some investors might find the technicalities of crowdfunding real estate difficult to grasp, making it unreliable.  Crowdfunding real estate investment establishes itself in the market as a substitute for traditional real estate investments, hence, learning how to evaluate your investment becomes very important.   Here are a few points that you must remember while evaluating your crowdfunded real estate.  What is Crowdfunded Real Estate Investment? Real Estate Crowdfunding is a modern-day investment method which deals with raising money for a real estate-based project or commercial properties by taking small sums of money from a large number of people.  This way every investor becomes the owner of a share of the property.   Pros and Cons of Crowdfunded Real Estate Investment Any form of investment has some disadvantages and advantages, depending on the user and how they weigh these two to come up with a perfect investment solution.  Pros…

    Read more

    Crowdfunding Vs P2P Lending: All You Need To Know

    Crowdfunding and P2P investment models are the two ways of asset accumulation that are becoming very popular in the CRE market. While these are often regarded as the same, They are different from one another.  Crowdfunding Meaning Crowdfunding is a method where a large number of investors come together to raise money for a high-end commercial project. Crowdfunding is an online investment, therefore investors can invest in assets across the globe and enjoy benefits Types of Crowdfunding There are three types of crowdfunding  Equity crowdfunding This is the most popular form of crowdfunding as it allows investors to become the part-owner of the project. In equity-based crowdfunding, investors trade their capital to purchase the equity of the project. The equity owners receive a share of profits in form of dividends.   Reward-based Crowdfunding Here, people invest in an asset and expect rewards such as goods and services in return. Some examples of these types of investments include funding a civic project,…

    Read more

    Fractional Commercial Investment- The Emerging Trend Among Investors Between 30-60 years!

    People have traditionally put their money into land, which is a growing asset. Due to the rising scarcity of land and high demand for it, such real estate developments have offered investors good returns and have assisted them in accumulating wealth. Even though current high-rise residential unit ventures have very little land ownership and are mostly made up of depreciating assets, commercial real estate investment generates far more cash flow through rentals. Investing in high-end real estate, on the other hand, requires a large sum of money that is only available to HNIs and Ultra HNIs. Bengaluru, Pune, and Mumbai have emerged as the most promising destinations for fractional commercial real estate investments in the future. Increasing demand for fractional commercial investment by professionals Doctors, IT experts, Entrepreneurs, and other company owners are among the investor and user sectors with the highest relative interest in fractional ownership of commercial real estate. Around 30% of chartered accountants planned to invest in…

    Read more

    Here Is Why Fractional Ownership Is The Best Investment For Senior Citizen

    Retirement is supposed to be a time when people take a break from the hectic lifestyle and spend time doing what they truly love, but for most people, it is simply the end of a regular income. This can result in a lot of time spent worrying about expenses, making passive income-generating investments essential.   To invest smartly, one needs to look beyond the conventional fixed deposits and traditional real estate investments and look for alternative asset classes that can provide regular monthly income, with the security of capital and a steady wealth expansion for living a hassle-free life.  This is where fractional ownership of real estate comes into play, so let start with a basic question, what is fractional ownership?  What is Fractional Investing? Fractional Ownership of real estate is an investment method where a group of investors pools their funds to collectively make a real estate investment, mostly CRE or Commercial Real Estate.  This helps reduce the cost burden…

    Read more

    Hyderabad Residential Market: The best investment opportunity in India in 2021

    If there’s one city that’s enjoying the glory of a flourishing property market, it’s Hyderabad. The city has stood out for having the largest percentage gain in sales and a constant price increase over the last five years. Despite the COVID-19 pandemic, end-user demand rose in Hyderabad, which saw a 39 percent year-on-year increase in house sales during the January-March period of the current calendar year. Despite a substantial increase in new supplies, the hi-tech metropolis has the shortest inventory overhang of 25 months. Hyderabad’s residential property market, which was impacted by the state’s partition into Andhra Pradesh and Telangana, has seen continuous growth in terms of sales, launches, and price appreciation during the last few years. In the first quarter of the calendar year 2021, the trend has maintained. In this article, we will be discussing the growing residential market in Hyderabad amidst the political tussle between Telangana and Andhra Pradesh. We will be discussing the hot debate in…

    Read more

    HOW CAN YOU MANAGE YOUR WEALTH
    WITHOUT THE RIGHT FINANCIAL INFORMATION?
    Sign up for smart insights from industry experts!
    mail-logo
    whatsapp_logo
    Invest Now