MUMBAI: Home loan seekers may be in for a windfall with mortgage companies set to embark on an interest rate war amid a slump in the cost of funds as a consequence of demonetisation, in the process acting as a tonic for the moribund real estate sector.
Mortgage companies like Housing Development Finance Corp (HDFC), Indiabulls Housing Finance and DHFL may slash rates by 25-50 basis points in a few weeks as they are under pressure to push growth amid sluggish demand, said industry executives familiar with the matter. A basis point is one-hundredth of a percentage point.
“Demonetisation has inadvertently helped cut funding costs for us as we raised cheap money from bond market,” said Indiabulls Housing MD Gagan Banga. “We should be able to pass on benefits of lower borrowing costs to customers as we expect higher home loan demand in coming quarters.” He didn’t say what the new rates would be. Demand for homes and home loans slumped after the Centre announced on November 8 that Rs 500 and Rs 1,000 notes would cease to be legal tender.
Source : ET Realty
Mortgage companies like Housing Development Finance Corp (HDFC), Indiabulls Housing Finance and DHFL may slash rates by 25-50 basis points in a few weeks as they are under pressure to push growth amid sluggish demand, said industry executives familiar with the matter. A basis point is one-hundredth of a percentage point.
“Demonetisation has inadvertently helped cut funding costs for us as we raised cheap money from bond market,” said Indiabulls Housing MD Gagan Banga. “We should be able to pass on benefits of lower borrowing costs to customers as we expect higher home loan demand in coming quarters.” He didn’t say what the new rates would be. Demand for homes and home loans slumped after the Centre announced on November 8 that Rs 500 and Rs 1,000 notes would cease to be legal tender.
Source : ET Realty
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