Home Loan EMIS to get Cheaper than Rent
Apr 24, 2019 Home Loan
On April 4th, the Finance Minister Arun Jaitley announced that the government is planning to make home loan EMIs cheaper than paying the average rent. This decision has come after the Reserve Bank of India reduced its repo rates by 25 basis points.
Most people stay away from buying the property because of the higher interest rates. Paying the principle and the interest rate for the EMI ends up being double the rental cost. Also, the financial burden for the next 15 to 20 years is another reason people shy away from investing in real estate.
The government has been making efforts to boost the real estate market. The introduction of RERA and GST was thought to increase sales in the real estate industry. Even after reducing the home loan rates last year, there hasn’t been much increase in sales. This new effort by the government is being looked keenly by potential investors.
It is a general rule that when RBI reduces the repo rates, the banks have to reduce their repo rate as well and pass the benefit to the customer. The banks do not immediately pass on the benefit to the customer, but they eventually do so.
There are many advantages to buying a property. First, one will not have to deal with their landlord and keep looking for new accommodation every year. The rental cost increases by 11 percent every year as well. The home loan interest rate will, however, be the same throughout. At the end of the loan payment, you will be the owner of the property. Though the entire loan term can be anywhere between 15 to 20 years, at the end the money you are paying for EMI for the property. Your property can be your asset in future if you ever need money.
Most people stay away from buying the property because of the higher interest rates. Paying the principle and the interest rate for the EMI ends up being double the rental cost. Also, the financial burden for the next 15 to 20 years is another reason people shy away from investing in real estate.
The government has been making efforts to boost the real estate market. The introduction of RERA and GST was thought to increase sales in the real estate industry. Even after reducing the home loan rates last year, there hasn’t been much increase in sales. This new effort by the government is being looked keenly by potential investors.
It is a general rule that when RBI reduces the repo rates, the banks have to reduce their repo rate as well and pass the benefit to the customer. The banks do not immediately pass on the benefit to the customer, but they eventually do so.
Should one get into real estate after this?
It is indeed an excellent time to step into the world of real estate and buy the property. For potential buyers who are looking for another encouragement, this move will serve precisely right. The home loan rates are at a record low, and it is the best time to make the most of it and buy the property.There are many advantages to buying a property. First, one will not have to deal with their landlord and keep looking for new accommodation every year. The rental cost increases by 11 percent every year as well. The home loan interest rate will, however, be the same throughout. At the end of the loan payment, you will be the owner of the property. Though the entire loan term can be anywhere between 15 to 20 years, at the end the money you are paying for EMI for the property. Your property can be your asset in future if you ever need money.
Looking for property portal?
Related Articles
-
-
How to Get Better Home Loan Rate by Negotiation
Jun 12, 2018 -
Types of Borrowers: Which One are You?
Sep 26, 2018 -
When & Why I Should Get Pre-Approved For A Mortgage?
Mar 24, 2016
See comments (0)
Write a comment
