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In these times of lockdown, a number of people are worried about their investments and its future. Is it now the best time to invest in real estate? Conventional wisdom will shove you away from even thinking about taking such a risk. These are not normal times. The whole country is tightly squeezed in a lockdown scenario, with a pandemic spreading its tentacles slow and steady.Though it may not be the right time to expect any sudden boom at least until the next quarter, it is definitely the right time to think about making a new investment in commercial real estate. Several reasons can be attributed to why this could be a good time for new investors. 

It is the first time in 17 years that home loan interest rates have fallen below 8%. HDFC offered 7% interest rate for housing loan above 75 lakhs till dec 31 as monsoon bonanza offer and that of SBI is 7.15/7.20% based on their cibil score.

This indeed is great news for all of us! Why? One, your aspiration to own a home becomes easy, with a reduced burden on your monthly EMI. Two, our aspiration to build your world comes true. For 20 years we have strived to bring you own homes, with highest quality standards at competitive prices.

SBI is the first bank in the country to link its loan lending rate with an external benchmark, which is Reserve Bank of India’s repo rate. The loan interest rates linked with repo rate is called as Repo Linked Lending Rate (RLLR). SBI terms it as External Benchmark Rate (EBR).

One important thing to note is that these interest rates are not just based on EBR but there are other factors also. Some common factors affecting interest rates are gender, age of the borrower, employment status, loan amount, loan repayment tenure and most importantly the risk profile of the borrower. Usually, banks charge a premium over loan interest rates to cover these risks.

Apart from 7.95% (premium of 15 bps) interest rate for Rs.30 lakhs loan, SBI is offering 8.2% (premium of 40 bps) as the interest rate on home loans of Rs 30 lakhs to Rs. 75 lakhs. Home loans above Rs.75 lakhs will be levied 8.3% (premium of 50 bps) interest rate.

 

 

HDFC EMPLOYED- INTEREST RATE FROM JULY 31,2020

HDFC EMPLOYED

HDFC SELF EMPLOYED

SBI

 

Grade I

Grade II

Grade III

Grade IV

MONSOON BONANZA OFFER- SCORE 730 & ABOVE OFFER TILL DEC 31, 2020

30 Lakhs and below 

Credit Score  780 & above 

Credit Score  700-779

Credit Score 650 -699

Credit Score below 650 & NTB /NTC

Normal

Cibil score /Yono

Women

6.95

7.15

7.30

7.35

6.90

7.05

6.95

6.90

Others

7.00

7.20

7.35

7.40

6.95

7.10

7.00

6.95

 

 

 

 

 

 

 

 

 

30-75 Lakhs

 

 

 

 

 

 

 

 

Women

7.20

7.30

7.45

7.50

7.00

7.10

7.20

7.05

Others

7.25

7.35

7.50

7.55

7.05

7.15

7.25

7.15

Above 75 Lakhs

 

 

 

 

 

 

 

 

Women

7.30

7.40

7.55

7.60

7.00

7.10

7.30

7.20

Others

7.35

7.45

7.60

7.65

7.05

7.15

7.35

7.30

 

 

 

 

 

 

 

 

 

Furthermore, other profile parameters of the borrower facilitate SBI to decide on loan interest rates and they are:

  • For un-salaried borrowers, a premium of 0.15% will be added to the interest rate.
  • For loan amount up to Rs. 30 lakhs, if LTV ratio is more than 80% but less than 90%, a premium of 0.10% will be added to the interest rate.
  • For borrowers falling under the risk group of 4 to 6, a premium of 0.10% will be added to the interest rate.
  • For women borrowers, 0.50 bps concession will be provided on the interest rate.

Taking a loan is a good investment as we are expecting money value decreasing in the future and starting loan emi would not be a considerable amount after 10 or 15 years due to the money value that time.Calculate your EMI  using the below link,

https://homeloans.sbi/calculators

Traditional assets losing credibility: 

For times immemorial, gold had been a valuable asset for Indian families owing to its high degree of flexibility. Gold can be bought for even a few grams and it is easy to sell and get the investment back. However, recent price depreciation has stolen the sheen away from the yellow metal. What was viewed as a safe and stable investment even during tough times is now considered a dead asset. For serious investors, real estate is now the most viable option as it is safe even from economic meltdowns.

Viable Hard Asset:

Real estate is certainly a safe bet for investors and their interest is far from over. Real estate will prove to be the perfect asset class in terms of both, regular income as also capital value appreciation. Unlike other investments that you make, real estate is not paper money. You can hold the asset for a long time. The return on this investment is pretty high. Even if you do not do anything, the money is going to multiply. Now, this is the main reason a lot of people invest in real estate.

Higher Yields In The Real Estate :

Real Estate offers risk-mitigated competitive returns. Although residential land has stayed stable in recent years, commercial land continues to post attractive returns. a billboard asset during a prime location can easily give a mean annual appreciation to around 7-10%. At a time when the share prices & financial markets are volatile, such a return might be the game-changer.

Technology Bringing Seller and Buyer Closer :

You might think that it is hard to view any residential or commercial property physically due to lockdown, so in such a scenario making an investment is like a distant dream. But we are taking advantage of advanced technology and introducing innovative ideas that help the real estate as well as brokerage firms to stay afloat in turbulent times. Sales professionals are using e-brochures, walkthroughs, virtual tours, conducting video conferencing with clients for showcasing the properties, and resolving their queries. So, without going anywhere, buyers can view different properties at the click of a mouse. This eventually results in saving time and money for both parties.

So, if you are gunning for maximum returns in the future, the time is now to invest…and invest in real estate. So in these times of social distancing, don’t just lock yourself. Make use of the isolation downtime, do some thorough research, study various sources of passive income & make the foremost of this point at hand to form meaningful investments.

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