The Indian economy is still suffering from the shocks of the Covid-19 pandemic, as a result of which the Reserve Bank of India has kept the repo rate at a record low of 4% to boost lending and encourage an economic revival. This has led the banks to reduce their floating interest home loan rates to multi-decade lows. The realty sector has also seen some price corrections to clear their inventory in an economy that has experienced major setbacks brought in by the pandemic. All these, interestingly, are making the current housing market a buyer’s one.
So, if you have the necessary margin money, a stable income and adequate contingency savings, you might want to go ahead and finalise your home-buying decision to take advantage of the low interest rates and may be lower property prices too.
Another thing aspiring homeowners must consider is their credit score which has now become more relevant than ever before. They must understand that these repo-linked home loans introduced by the banks typically consist of a credit risk margin too. Meaning, the lowest possible interest rates are usually reserved for those eligible applicants who have stellar credit scores (above 750-800), according to BankBazaar.
The rate difference for applicants with excellent and poor credit scores could be around 100 basis points. As such, if you’re an aspiring homeowner, you would be well-advised to ensure your credit scores is good in order to get the lowest possible rates.
So, if you’re planning to take a home loan, here’s a list of 15 banks that are currently offering floating rate home loans starting at under 7% p.a. Do note, the interest rate applicable to you would be determined on your chosen property’s size and location, your age, income, gender, credit score, loan amount, lender among any other terms and condition laid down by your bank, as per BankBazaar.
Also note, the EMIs of repo-linked loans would increase proportionally as and when the RBI hikes the repo rate in the future. So, you may also want to make as much part-prepayments as possible in addition to EMI payments when the rates are low to become debt-free sooner.
15 Banks Currently Offering The Lowest Interest Rates On Repo-Linked Floating Home Loans
Disclaimer: Data taken from respective bank’s websites as on January 15, 2021. Data compiled by BankBazaar.com. *Based on a press release.