What Are Banks Offering Homebuyers This Festive Season?
India's real estate sector is expecting this festive season to mark the start of a new era. And, they have many reasons to expect so. States have by and large set up their Real Estate Regulatory Authority (RERA), a development that has encourages buyers to reinstate their trust in the sector.
On its part, the country's banking is also seen taking measures that would enable prospective buyers to invest. The Reserve Bank of India, for instance, reduced the policy repo rate by a cumulative 175 basis points (bps) between January 2015 and June 2017. Banks reduced the one-year marginal cost of funds-based lending rates (MCLR) by a cumulative 77 bps between November 2016 and June 2017.
However, the ongoing festive season has encouraged them to offer you even sweeter deals. In case you are planning to buy your dream home this festive season, here are certain offers that you may consider, depending on your needs and budget.
Axis Bank's EMI waiver offer
You may already have seen the advertisement featuring actors Revathi and Vikrant Massey that is being aired across television channels at great frequency. The exchange that takes place between a liberal mother and a soon-to-be married son while they are driving home has a socio-economic message. The contents are not only emotionally touching but also financially benefitting. Here is what is on offer.
Axis Bank's new home loan product, Shubh Aarambh, provides you an opportunity to save money you will be spending towards the repayment of 12 months of equated monthly installments (EMIs). However, you have to fulfill to certain terms and conditions for the bank to waive the EMIs.
- First of all, this offer is open only to resident Indians.
- The amount you could apply for under this scheme is Rs 30 lakh.
- The minimum repayment tenure at the time of disbursement of the loan should be 20 years.
- You cannot prepay your loan before four years to avail of the benefits.
- You need to maintain a good repayment record. In case you fail to do so, the benefits of the offer will not be extended.
- If all goes fine, four EMIs will be waived at the end of the fourth year, eight and 12th year of the repayment period.
Do note that the bank charges 8.35 per cent per annum if a salaried individual opts for a home loan based on a floating rate of interest. In case of self-employed people, the rate is kept at 8.40 per cent an annum.
The borrower has to pay one per cent of the loan amount as the processing fee.
ICICI Bank's cash-back offer
India's largest private sector lender ICICI Bank wants you to do business with you for as long as it could. Keeping that in mind, the bank has launched a new loan product — a one-per cent cash back on your monthly installment payment. The new product can help a borrower get up to 11 per cent of the principal loan amount as cash back if the repayment tenure is kept at 30 years. By offering this incentive, the bank is aiming at retaining a borrower for a longer period.
“The product incentivises the customers to stay on for a longer period of time which is healthy from a customer as well as bank perspective and generally from an ecosystem perspective," ICICI Bank Executive Director Anup Bagchi told media.
Sounds good enough? Do note that:
- The offer is only for new home loan borrowers.
- Under this scheme, there is no limit on the loan amount you can apply for.
- The repayment tenure could be 15-30 years.
- Residents, as well as NRI, can apply for the offer.
- The effective rate of interest for borrowers availing of an affordable housing product is 4.62 per cent.
Are you an existing borrower? Here is something for you, too
Those already repaying a loan also have reasons to cheer. Many public sector banks, including State bank of India, recently announced a reduction in their base rate.
After the reduction that comes into effect on October 1, SBI will charge 8.95 per as interest on loans linked with the base rate system. Similarly, Bank of Baroda will charge an interest rate of 9.15 per cent; the earlier rate was 9.50 per cent. Andhra Bank has reduced base rate to 9.55 per cent from the earlier 9.70 per cent. The move by these public sector lenders will benefit a great number of existing borrowers.
Do note here that SBI has also waived processing fee on all home loans.
Earlier, SBI also a loan scheme, Hamara Ghar, for the affordable housing segment. The loans under this scheme will have a fixed rate of interest for two years, up to a loan amount of Rs 30 lakh.