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Home loan rates at 15-year low: Experts discuss trends in housing market

Updated : March 03, 2021 12:15 PM IST

Kotak Mahindra Bank has cut its home loan rates to 6.65 percent after State Bank of India (SBI) cut their rates by 10 basis points. Kotak's home loan is at the lowest interest rate in the market and home loan rates in general are at a 15-year low. Are lenders cutting rates to make the most of the sops offered by states? Will demand sustain beyond their expiry? Ambuj Chandna, President-Consumer Assets of Kotak Mahindra Bank and Anshuman Magazine, Chairman and Managing Director of CBRE South Asia shared their views and outlook for business going forward.

“We see quite a few trends in the housing market. We see a reasonable pick-up in the core housing sales market in the last quarter and this quarter driven largely by work-from-home, need for larger houses, the fact that interest rates are one of the lowest, governments trying their best – we see the stamp duty impact coming in Maharashtra, all this combined we see a reasonable lift in housing market,” said Chandna.

“We want to participate in this housing rally, we want to grow our business, one needs to pass value to consumers and offer them a rate, which allows them to get into the dream houses that they have been wanting to do. So that is our paradigm and within which we decided to drop our rates at 6.65 percent,” Chandna added.

“At this point in time, we believe 6.65 percent is a very good rate. We have offered it till March 31. Home sales tend to peak in March. So I think what we offered today is a very good rate and we will take it from there,” Chandna mentioned.

The total home loan book is around 10 percent for Kotak Mahindra Bank. “We have seen a substantial growth in the last two quarters,” Chandna stated.

Anshuman Magazine believes increased supply of affordable houses is leading to higher sales. “The supply of affordable housing coming in is also one of the reasons for demand and the pent-up demand has also been there, there is end-user demand,” Magazine said.

“The borrowing rate for the banks has been lower and this is one of the reasons why there has been competitive bidding for the mortgage rates and they are going down also because of low risk. For the banks, mortgage lending has been relatively a much lower risk category and with the interest rates overall coming down, I do expect that this will remain interesting going forward and the interest rates will remain competitive,” Magazine pointed out.

For entire discussion, watch the video...

Published : March 03, 2021 12:15 PM IST

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