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Unlock your dream of buying a house with Standard Chartered Home Loan Solutions.

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Unlock your dream of buying a house
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Unlock your dream of buying a house with Standard Chartered Home Loan Solutions.

Though the pandemic has caused considerable financial havoc, it might be a good time to invest in a real estate, especially if you wish to stay in that house. This is because, the interest rates on home loans slashed considerably as macro interest rates fell and lenders lowered their interest rates. So, if you are thinking of buying a house, time is on your side. After a span of 15 years, home loan interest rates have gone below the record level of 8%. The last time home loan interest rates were below 8% was back in 2003-04.

The benchmark rate:

Currently, financial institutions link their home loan interest rates to the repo rate of RBI. This rate is called the Repo Linked Lending Rate (RLLR). The home loan interest rate depends on RBI’s repo rate and since RBI slashed its repo rate, the home loan interest rate has also been lowered consequently.

So, now if you apply for a home loan, the interest rate would be linked to the repo rate and a lower repo rate would give you a lower rate of interest.

Floating and fixed rate of interest

The fixed rate of interest for a Home Loan promise a fixed rate for the entire tenure while a floating rate of interest, it is marked to the market rates. The floating-rate loans give uncertainty on the rate of interest over the loan tenure while the fixed rate can prove to be expensive especially in a falling home loan scenario such as now.

However, you might not need the entire amount at one go. Payment for houses, especially under construction, needs to be done in phases. To overcome both these rate concerns and yet make the most of your home loan, you could also opt for Home Saver option wherein your home loan would be lighter on your pockets. Under this option, you need to pay the interest only on the amount utilized and not for the entire loan amount! You could transfer your existing home loans to this option as well. The Home Saver option calculates the interest on the daily balance along with re-finance options within 6 months of the property purchase as well as insurance coverage.

Why this is the best time for a home loan?

Besides the low-interest rates, here are some reasons why this is the best time to apply for a home loan

  • Since the interest rates are low, the EMIs would be lower making the home loan You can, therefore, opt for a higher quantum of loan, if needed and still afford the associated EMI.
  • When the home loan EMIs are lower and affordable, the chances of repayment default reduce considerably. This allows you to maintain a clean credit report and also save on the interest cost which occurs if you default on repayment.
  • Lastly, in the current Union Budget 2021, the Finance Minister extended the tax benefit on the affordable housing scheme for another year. Thus, if you buy a home whose stamp duty value is up to INR 45 lakhs, you can avail of an additional deduction under Section 80EEA of the Income Tax Act, 1961 on the home loan interest paid.

The RBI might reduce the repo rates further in future or increase them as the economy recovers post this pandemic. Why wait for the uncertain future when you can avail of home loan with low interest rate now?

With rates below the 8% mark, this is the best time to invest in the home of your dreams. Compare the loan interest rates of different lenders and choose the lender that offers the home loan lowest interest rate and invest in your own home by applying for a Home Loan .  You can fulfil your dream of owning a home and create a property in your name and also save on the interest costs and get a pocket-friendly loan. Why wait? The home of your dreams is calling on you. Apply for a Home Loan and get the benefit of reduced rates.

Disclaimer

The views expressed in the article are those of Standard Chartered Bank (“SCB”) and do not constitute financial, professional or other advice. SCB, including its Directors, Officers or Employees shall not in any event be liable for any damages or injury arising merely from your reliance on any information provided here. Each bank / financial institution will have its own processes/ fees/ charges and any information contained in this Article is only indicative. Before placing any reliance on any information contained or views expressed in this Article, we would request you take all steps necessary to verify the correctness thereof. The information contained in this Article is only indicative. Each Standard Chartered Bank Product has its own terms & conditions and should be referred to in entirety. We request you to kindly visit “sc.com/in” or visit your nearest Standard Chartered Bank Branch or call on our Customer Care numbers for more details.