New Delhi: The housing loans are set to get cheaper with the Reserve Bank of India (RBI) making it possible for banks to lend more to home-buyers, and at lower rates. This move should benefit customers as well as real estate developers. The central bank did this by reducing the amount of money banks have to set aside (as security) on home loans.
Previously, they had to set aside 0.4% or Rs 400 per lakh. This has now been reduced to 0.25%, or Rs 250 per lakh. The reduction in the amount banks have to set aside (also called a provision) also mean lower home loan rates.

The central bank also reduced the so-called risk weightage on home loans of between Rs 30 lakh and Rs 75 lakh to 35% from 50%, and over Rs 75 lakh to 50% from 75%.Banks are focusing on affordable housing as demand from other sectors of the economy has dried up and to take advantage of incentives offered by the government to home buyers.
Many banks have reduced their home loan rates. The government on December 31lastannounced the Credit Linked Subsidy Scheme for Middle Income Groups, where interest subsidy of 4% was granted on housing loans of up to Rs 9 lakh and 3% on housing loans of up to Rs 12 lakh.
According to a report by CLSA India Pvt., housing sales could rise from Rs7 trillion in financial year 2017 to Rs17 trillion by fiscal 2024 on the back of market growth and impetus to affordable housing.
Ends