There is simply no respite
The Hindu : nced recently by a few housing finance companies and banks and the possibility of others also following suit, with the festival season round the corner, could not be better timed.
The slashing of the rates comes at a time when the real estate is going through a sluggish patch in the backdrop of the sharply rising land prices making middle class households increasingly feel there is little for them to purchase.
While representatives of the realty sector are happy about the reduction, as they feel that the move would revive customers’ interest, existing customers of most of the HFCs and banks who opted for floating interest rates feel that they are being discriminated against. This is because the reduction in the rates is only for new customers, i.e., those who will seek loans afresh.
What this means to the existing customers is little respite from the rather sharp increase in the rates on their home loans in the last two to three years. Their demand for also being extended the benefit of the recent reduction is not without reason as many of them have seen the interest rates spiral from 8 to 10 per cent or even more. It meant either an increase in the EMI (Equated Monthly Instalment) amount or the repayment tenure.
Upward movement
Sources in HFCs said most of the institutions were in the practice of revising the floating rate every quarter though for some quarters the movement has been only upwardly. While pointing out that the reduction could well mean the beginning of the end of the alarming phase with regard to the spiralling rates, an official of LIC Housing Finance Limited said the reduction is translating into more customers.
As regards the decision of the institutions to apply the reduction to…More
