Rise in Home Loan Rates

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Rise in Home Loan Rates

The rise in Home Loan Rates – Public Sector and Private Lenders – Who is Doing What

Rise in Home Loan Rates

You can be one of them who dreams for a home but the dreams get shattered with the rise in home loan rates. the interest rate goes down, there is no need to change anything because you are going to benefit from the lower interest rate. Then the cost for you goes up because you will be paying more interest than what you would have paid if the interest remained constant. You should not apply for a loan when there is a Rise in Home Loan Rates.

Public sector banks are ready to face the challenge from the Finance ministry, but they resist rise in home loan rates, but the private sector lenders are all set to raise the lending rates. RBI took measures to strengthen the rupee by Liquidity. It has prompted leading banks like HDFC and AXIS and there is a Rise in Home Loan Rates. The public banks did not take any step to raise rates despite hurting their profitability.

The shares of Home Loan in their portfolio for public banks range from 10 % to 20 % with a growth of 15% per annum. India’s leading bank SBI says they had profited from the present liquidity. The SBI has gained 40 basis points, and the annual growth has increased to 15%.

“Public banks are not willing to increase their interest rates, and they are waiting for the time when the rates will be carved down. This will give ease to public banks from the Finance Ministry,” According to a bank chief.

The banks like Union Bank of India, Canara Bank, and Bank of India had met Finance Minister resisting to hike the rate of interest just before that the RBI took Liquidity measures to support the fall in the rupee. Andhra Bank, the only PSU bank that has increased lending rates to 10.25% last week.