Home loan interest rates fall below 7%

Industry experts are advising homebuyers to take a home loan now as perhaps they won't be able to get a better deal going ahead.

Home loan interest rates fall below 7%

Are you looking to buy your dream home by taking a home loan? If yes, there is good news for you. In this falling interest rate regime, almost all leading banks, including the State Bank of India and HDFC, have reduced their home loan rates a number of times, the result being that the interest rates on housing loans are currently available at historic lows – even below 7 percent in some cases – providing a very good opportunity to home loan takers.

For instance, while SBI has started giving home loans at 6.95 per cent interest rate starting from July 1, 2020, HDFC has been offering home loans at 6.95 percent interest rate, for those having a credit score of 780 and above. And many other banks are also offering loans below 7 percent.

No wonder, industry experts are advising homebuyers to take a home loan now as perhaps they won’t be able to get a better deal going ahead.

“If you enjoy stable income and have the necessary margin money for your home purchase, this is certainly a great time to take a home loan. Many home loan products are now selling at sub-7 percent rates, which is historic. Therefore, if your finances support it, you should avail the many opportunities available to you,” says Adhil Shetty, CEO, BankBazaar.com.

What to do?

However, never let the interest rate alone to influence your decision to opt for a housing loan. Apart from the interest rate, you also need to check, say, the lender’s credibility and the various charges, among others, which may differ from bank to bank.

Moreover, before opting for a home loan, you must take some precautionary steps which will help you avail a home loan at the cheapest rate.

For instance, always be aware of your credit score. The lowest interest rates today are reserved for borrowers with the best credit scores. Some use 700 as the benchmark. Others prefer 750 or 800. Therefore, before you apply for any loan, take a couple of minutes to download your free credit report from the internet. Know what your score is and whether it helps you get the best rates from your preferred lenders.

You can also compare your options and go for the lender that offers the best repayment terms to you. And while the rates might be low, you also need to factor in the other associated charges like loan processing fee, loan transfer fee, stamp duty and registration charges, GST, etc.

“If you’re servicing an RLLR home loan, you might have already started enjoying lower EMIs. And if you’ve been repaying an MCLR loan and your EMIs haven’t reduced yet, you might have to wait a bit longer for the new reduced EMIs to come into effect. That being said, if your finances permit, see whether you can take advantage of these low rates by making prepayments to not just lower your loan burden, but also in a bid to become debt-free faster,” advises Shetty.