Chennai
With the home loan lending rate stabilising and property prices inching high, there has been a dip in the quantum of home loan applications being received by leading housing finance companies and banks. While a leading nationalised bank has estimated the dip by 10 per cent over last year, there are others who do not feel the pinch as there has been a consistent demand maintained this year. A few have even reported 25 per cent growth rate over last year. The average size of the loan has also reduced as the fast moving segment in the residential category across most micro markets is said to range between Rs 20 lakh and Rs 40 lakh.
In a fierce competition prevailing among HFCs and banks, a marginal variation in lending rate does not cause concern for borrowers as emphasis is laid on service and processing time which is becoming major criteria among home loan borrowers. At the same time, fixed rate option is becoming popular among a section of the people due to the increase in the quantum of loan as well as the tenure of the loan prescribed by select institutions, according to industry sources.
LIC Housing Finance is offering fixed rate option loan at 10.7 per cent for three years and 11.15 for five years. While Indian Bank offers fixed rate option up to Rs 2 crore at 11.5 – 12.0 per cent, Dena Bank extends the tenure even upto 10 years. Corporation Bank offers fixed rate option at 11.0-11.5 per cent. Federal Bank does not offer any fixed rate option but reduces the floating rate option to 10.48 – 11.23% depending on the loan amount and repayment period. A few banks do not offer fixed rate option at all.
With the demand for housing picking up in and around Chennai and seeking home loan an integral part of home buying exercise, it is expected that the competition will intensify in the coming months. In the bargain, improved service level, flexibility and strategic alliance with developers would transform the housing market for better days.
V Nagarajan, MagicBricks.com Bureau
