Banks Lower Home Loan Rates for Festive Season, Likely Boost To Real Estate l SR Real Estate Update

Real Estate Experts

To cash in the spending rush ahead of the festive season, several banks including the State Bank of India (SBI), Kotak Mahindra, Bank of Baroda (BoB) and Punjab National Bank (PNB) are offering loans at record low-interest rates.

SBI will charge home loan borrowers interest of 6.7 per cent based on their credit score, irrespective of the loan amount. The offers are available to all segments of borrowers irrespective of the profession of the borrower. The 6.70 per cent home loan offer is also applicable to balance transfer cases.

Kotak Mahindra Bank has reduced its home loan interest rates by 15 basis points (bps) from 6.65 per cent to 6.50 per cent p.a. This special rate of 6.50 per cent p.a. is a limited period festive season offer beginning from September 10th and ending by November 8th, 2021.

BoB is offering a waiver of 0.25 per cent in the existing applicable rates for home and car loans. In addition to that, the bank is also offering a waiver of processing fees in home loans – where home loan and car loan rates will start at 6.75 per cent and 7.00 per cent, respectively.

PNB too has slashed the repo-based lending rate by 25 bps to 6.55 per cent.

Expert views:

Pritam Chivukula, Co-Founder and Director, Tridhaatu Realty and Hon Secretary, CREDAI-MCHI

Real estate experts feel that these interest rate cuts could be a major factor in boosting the home sales this festive season. Commenting on banks offering loans at record low-interest rates, Pritam Chivukula, Co-Founder and Director, Tridhaatu Realty and Hon Secretary, CREDAI-MCHI said, “The banks are competing to grab the home loan customers before the fiscal year ends. Currently, the home loan rates are at an historic 15 year low, as banks compete in a market with low credit demand. The benign interest rates environment will continue for some time and it is unlikely that interest rates will fall further from the current levels. For the next few days, the buyers can swoop in on good deals on the back of rock-bottom interest rates on home loans along with festive offers from good developers on the eve of expected price rise. We can already see that the demand for residential properties has picked up now as people are beginning to believe that this is the best time to buy a property.”

Ashok Mohanani, President, NAREDCO Maharashtra

With a growing desire of owning a home as a necessity in the unprecedented time of COVID-19 pandemic, Ashok Mohanani, President, NAREDCO Maharashtra said, “This is the best time to buy a home as it gives the aspiring homebuyers a lifetime opportunity to purchase their dream home with various festive offers as well as all-time low interest rates. These factors are also proving to help spur the real estate demand that was temporarily hit last year as a result of the pandemic.”

Jayesh Rathod, Executive Director, The Guardians Real Estate Advisory

Jayesh Rathod, Executive Director, The Guardians Real Estate Advisory informs that it crucial for banks to pass on the benefits of the reduced repo rates to consumers for a long time now. He added, “We are happy to see the same happen now. The low interest rate regime is going to be a game-changer for the whole real estate sector especially at a time when the economy is on a recovery trail. It will also augur well for ready-to-move-in homes and the affordable housing segment. From the consumer perspective, this is going to be the last call to take advantage of the bank offers as a difference of even a half percentage on the interest rate on a housing loan can save lakhs of rupees of the prospective buyers.”


Cherag Ramakrishnan, Managing Director, CR Realty

Additionally, Cherag Ramakrishnan, Managing Director, CR Realty said, “The real estate market has seen decent sales this year and this reduction in interest rates would further help to keep up the sales momentum.”

Bhushan Nemlekar, Director, Sumit Woods Limited

“The real estate sector has benefited immensely from the record low home loan rates. Currently, the all-time low, sub-7 per cent interest rates are encouraging consumers to proceed with their purchase and quickly close their transactions. Low interest rates also help enhance eligibility for home buyers thereby bringing more customers into the marketplace, added Bhushan Nemlekar, Director, Sumit Woods Limited.


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