Owning a home is a sign of emotional and financial security. The norm to own a home is now gaining more acceptance amid COVID-19 as it ensures stability for a family. In today's unpredictable economy and job market, it is crucial to not be worried about paying rent for your home.
As a silver lining to this time of crisis, it is now cheaper to take a home loan. Here are a few reasons to encourage you to visit your bank today.
In the last few years, home loans have become more affordable. For instance, interest rates on home loan were over 10% in the last decade. However, RBI has been continuously slashing repo rates, bringing them down by 115 basis points. As a result, interest rates have now come down to 7%. This means that home loan EMIs have reduced by up to 7.5%.
With interest rates at an all-time low and the availability of up to 90% sanction amount, it is the best time to own a house. You can also go for a more spacious home in the same budget without having to pay inflated EMIs.
Fixed Rate of Interest
It is expected that home loan rates are not going to get cheaper than this. Hence, buyers should consider going for fixed rates instead of floating rates in their home loan agreement that may tend to get expensive once the economy picks up and RBI tweaks its monetary policy.
Opting for fixed interest rates on your home loan tenure will enable you to leverage the benefit of cheap interest rates throughout the tenure.
Developers Offering Discounts
To increase demand, developers are also offering several incentives to buyers. You can get an additional rebate of up to 1.5% on your home loan. This means that a home loan interest rate of 7% will cost you just 5.5%. It can help you save lakhs of rupees in interest throughout the tenure.
You can also leverage the rebate to cut-short your home loan tenure by increasing the EMI and close the loan as early as possible.
You can earn a rental income of up to 2.5% on your home investment. Hence, your effective rate of interest will come way lower than the inflation rate. It is a win-win situation where you will get to earn rental income and also build a property for your future financial needs.
Considering the current economic slowdown, home loan rates are likely to increase for at least a year. If you can afford a home, it is the best time to go ahead and become a home owner today!