(Mobile home loans) Teaser rates on home loans to go as base rate debuts
No commentsBy kuldeep
Mumbai: Indias top lenders who have offered teaser rates on mortgages through special schemes to boost off take of loans will withdraw such schemes on Wednesday, as banks move to a new system of pricing loans from July 1. The special loan schemes launched by mortgage lenders HDFC, ICICI Bank and State Bank of India last year, featuring lower rates at fixed rates for the first couple of years will end on June 30. According to bank officials, none of these schemes are likely to be extended.
Indias largest bank SBIs and ICICI Banks pricing of home loans will shift to the new benchmark the base rate from July 1. SBI, which was the first to kick off this special scheme or teaser rates, is offering home loans at 8% for the first year, 9% for the next two years and linked to market rates in the subsequent years. HDFC, which was then forced to follow suit, offers a fixed rate loan of 8.25 % up to March 2011, 9% for 2012-13 and the prevailing rate thereafter. ICICI Banks scheme offers a fixed rate of 8.25% during the first year, 9% in the second year with the loan then being shifted to a floating rate linked to the prevailing benchmark.
SBIs aggressive move succeeded with the bank sanctioning an average Rs 2,000 crore of home loans every month. The bank then extended the scheme, as did HDFC, the leader in the mortgage lending segment. However, with the shift to the new benchmark, there is uncertainty relating to how banks would price their home loans. Banks have indicated that their base rates would be in the range of 8-10%, but there is no clarity now on the spread at which they would lend. So far, banks could structure special home loan schemes to attract new customers as they were allowed to lend below the prime lending rate. Under the new system of pricing loans, which comes into force from July, no bank can lend below the base rate.
Old borrowers will have the option to shift to the base rate as the new benchmark. But some bankers say they may have to continue announcing the prime lending rate as a benchmark simultaneously since they have already contracted with borrowers to peg interest rates to the PLR. The base rate will favour borrowers in a falling interest rate regime as lenders would have to revise the base rate to reduce lending rates.
RBI has made it clear to banks that any changes in the base rate will have to be applicable to existing customers as well. However, what needs to be borne in mind is that the central bank has only told banks to adopt the base rate system, which is not applicable to housing finance companies and NBFCs. In the last interest rate cycle, many old customers complained that they did not receive the full benefit of lower rates on their homes loans as banks offered lower rates to new customers while old customers continued to pay higher rate.
Banking analysts say if the base rate is in the range of 8-10%, home loans would have to be priced higher than this. Further, home loan rates are expected to go up as interest rates are now headed northwards. Many banks have held back a review of their interest rates until the adoption of the new benchmark. RBI executive director Deepak Mohanty said the base rate system will not increase the effective cost of borrowing as projected by the corporate lobby and that it was aimed at bringing more transparency in the lending rates. Bankers are of the view that interest rates on home loans will continue to be competitive since it is a secured loan.
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Top Property Investment Destination in Asia - India
By Real Estates
India is the next best property investment destination for investors across the world. Indian economy growing like never before, has opened the flood gates for investors in number of sectors. The new FDI i.e. (Foreign Direct Investment) policy attracts a large number of companies across the world, eyeing investment opportunities in India through joint venture partnerships, private equity and 100 % Foreign Direct Investments. India leads as the top most destinations for real estate investment in Asia for 2010.
Real Estate A Liberal Policy
Amongst all other sectors open to investments now, real estate happens to be one of the major investment attractions for private equity funds and overseas corporations. There is a growing demand for affordable housing; data sourced from the Technical Group on Estimation of Housing Shortage estimates a shortfall of 26.53 million houses between 2007- 2012. This is a great opportunity where private investors and real estate developers in India are now focusing on this new emerging segment. Property in the housing sector includes commercial complexes, integrated townships, multiplex etc, attracting FDI (Foreign Direct Investment) worth US $ 8.5 billion. Indian property markets are now attracting investors, especially the NRI and PIO, who are encouraged by the government to invest in Indian property market.
Careful & Planed Investment
Investment in Indian real estate needs careful planning and thorough knowledge. Real estate in India is still an un-organised sector. It is important to know where you invest, and with which developer. Select a developer by over viewing his business trading history and credibility, conduct an in depth analysis of the property markets and local developments, this plays a vital role and makes you a safe and better investor.
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Advantages And Disadvantages In Living In A Condominium
By Harry Dobell
According to many Philippine real estate experts, condominiums are considered as some of the most popular types of housing in the Philippines.
Although many other types of housing have also gained a lot of popularity in the Philippines, such as townhouses and apartment buildings, many Filipinos still consider condominiums as the only type of modern housing which can provide every necessity they are looking for. So what are these necessities?
Accessibility to workplaces
First necessity that many Filipinos have found in condominiums is its location. Most condominiums are found in the heart of a busy business and commercial areas, such as in Makati City, which allowed its residents to live within walking distance or mass transit distance to their workplaces, a kind of luxury in which many other types of housing lacks.
Although found in the busiest districts in the city, condominiums are still known for its peaceful and private units in which residents can call as home.
Maintainability and security
All types of condominiums are known for its own maintenance personnel which maintains all facilities found in the condominium such as garages, elevators, hallways, cooling systems, and other facilities, while their security assures the safety of their residents.
Family-oriented
Although not all types of condominiums can offer a home for a growing Filipino family, a number of new types of condominiums have been found to give the right environment for a growing Filipino family. These is with condominium complexes.
According to many Philippine real estate experts, compared to condominiums in the city, most condominium complexes are found in the outskirts, far from the city. Because of its location, which is usually secluded, Filipinos can enjoy a more relaxing experience compared to living in a condo unit in the city. In addition to its location, these types of condominiums are also known for its amenities.
Amenities
Other than its family-oriented environment, condominium complexes are also known for its amenities in which residents can freely and exclusively enjoy such as swimming pools, recreational parks, playgrounds, as well as a gym or even a sports complexes for basketball games or volleyball games.
Disadvantages
Although considered as the most popular type of modern housing in todays trends, many Filipinos still saw a number of disadvantages in living in a condominium. One example is its condominium fees which is normally used for the maintenance of the whole condominium.
The amount of fees paid normally depends on facilities found in the condominium. According to many Philippine real estate experts, the more amenities or facilities found in the condominium, the higher its fees.
There are also separate disadvantages between condominiums and condominium complexes. Condominiums can provide an advantageous home for many Filipinos, but normally inappropriate for a growing family, compared to condominium complexes. The disadvantage condominium complexes, however, is that its location is a disadvantage for Filipinos working in the city.For more information visit to our site at http://www.ayalalandpremier.com
Exclusive and distinctive living experiences for discerning homeowners are the hallmarks of Ayala Land Premier.Philippines properties for sale Redefine your concept of home and luxury with Ayala Land Premier Philippine Real Estate.
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