Has Higher Interest Rates Dampened Demand For Home Loans? What Are The Emerging Trends? | ET MONEY SHOW
In the last one year or so, interest rates have climbed up dramatically. Rate hikes translated to higher EMIs for home loan borrowers. It has also discouraged many individuals to go ahead with their plans to take a home loan. So has the higher interest rate scenario dampened demand for home loans? What are the emerging trends? And most importantly, should you consider prepaying your home loan to battle higher interest rates?
On The Money Show, Adhil Shetty, CEO & Co-founder BankBazaar.com spoke with Kavita Thapliyal and shared his insights on home loan payment and demand trends.
Talking about the trends, Shetty said that the latest RBI data is available from January and we see that year to date this year the home loan outstanding has grown by 12 percent compared with 9.6 percent last year. So what data suggests that there is no decline as of January but if you talk to anyone in the market the general sense is that if rates continue to increase, that especially in certain sectors, you will start seeing pinch coming and slowdown starts happening.
“We are also seeing lots of people buying home right now because there is a benefit which is getting capped on capital gains savings by investing in residential homes, which ends this financial year. So a lot of people are trying to do it by March 31 to get that extended capital gains benefit which is getting capped next year.”
On being asked about the RBI rate hike impact on homebuyers, he said the 2.25 percent repo rate increase is having the greatest impact on the sub-45 lakh home buyer segment.