Government Banks Lower Rates For Home Loan

Here is the really good news for the Indian people who have no home
and think about take home. I will say this because the Government of
India lower home loan rate.

After a week of discussions, the Government of banks today lowered
interest rates on new home loans to R 20 lakh. The rate cuts, part of
the government in order to ensure, to strengthen the fight real estate
capitalization rates on new loans up to 5 R lakh to 8.5 per cent, while
loans between R and 5 lakh R 20 lakh to 9.25 per cent.

Building On Rate Cuts

EMI (RS Per Lakh )	Old *	New	Save
Up to Rs 5 lakh	1,101.09	867.82	233.37
>Rs 5 lakh & < Rs 20 lakh	1,101.09	915.87	185.22

*Calculations based on 12% fixed rate from State Bank of India

The new tariffs, which apply only to new borrowers, will help reduce
the equated monthly installments (EMIS) R 185 R 233 per lakh for
20 years loan tenures.

Banks are also said to reduce the interest rate on loans to micro and
small enterprises 50 basis points, small and medium-sized enterprises
of 100 basis points. To help these individuals outflow of liquidity crunch,
the additional credit in the form of 20 per cent of additional working
capital limits will also be provided.

The private sector, banks and large companies, such as housing finance
HDFC, however, are yet to take a call on how to respond.

Keki MISTRY, managing director of HDFC, the largest player in the
segment of loans at home, said Indian consumers are not transferring their
home loans as often. "The interest rate for new loans were virtually the same
level over the last few months, but I did not see this trend," he added.

On the possibility of lowering interest rate, MISTRY said: "This is a function
of availability of funds in the system and inflation. As the rate of inflation is
coming down the possibility of softening interest rates." More information
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