Bank of Baroda offers Respite in Home Loan Rate

The growth of housing loans has been adversely affected by rising home loan rates. From a 29.1% growth rate in 2005-06, the rate is expected to drop to 17-20% by the end of the current fiscal, as per a study carried out by Assocham.

According to the study, sales in the Indian real estate market have been
affected by as much as 60% by the hike in interest rates, and unless corrective
measures are not taken, a further slide can be expected, especially in
the metros.

The Bank of Baroda has brought down its interest rate on housing loans
by 0.5% with effect from September 1, 2007.
The rates apply to floating as well as fixed loans availed by individuals,
non-resident Indians and persons of Indian origin.

For loans upto Rs.20
lakh, the floating rate option is 10-11%, depending on the tenure, which
could be between 5 to 25 years.

Loans above Rs.20 lakh will now be charged between 10.25% and 11.5%,
depending on the tenure of 5 to 25 years.
Fixed rate loans for 5 to15 years will be charged an interest rate of
11.25% to 12.5% for a loan of upto Rs. 20 lakh.

Loans above Rs.20 lakh
will be charged at 11.5% to 12.75%.
Meanwhile, HDFC and the State Bank of India have announced that they
have no intention of bringing down the home loan rates.

Photo: State Bank of India MumbaiMain Branch by Ganesh Dhamodkar, licensed under CC BY-SA 4.0, via Wikimedia Commons.