Buy a home only when you are Ready

The right time to take a home loan is when you want to buy a house. After all, a loan is a means to an end. You should not time your purchase of property based on the interest rate cycle. This is even true for floating rate loans (and 95 percent plus home loans are on floating rate basis). After all, in theory at least, if the interest rates drop in the future, you will get the benefit of the rate drop at that time.

This is not to say that home loan interest rates should not affect your property purchase decision at all. If your loan eligibility is lower than what you require due to high interest rates or you do not have the necessary down payment required for the property, then clearly, you have to postpone the decision and wait till interest rates drop.

In fact, one good thing that has happened is that as rates have dropped over the last one and a half years, the spread between the base rate and the rate chargeable has dropped to as low as 0.25 percent in most cases and home loans are also available at base rates in a few cases. This will make it difficult for banks to provide interest rates even lower than yours to new borrowers in the future, without dropping the interest rates for you as well.

If the bond market signals are to be believed, you will have much lower interest rates in the next 3-9 months. Other factors, such as lower inflation also point to a lowering of interest rates in the future. If you take a home loan from a bank with a low spread over its base rate (not more than 0.25 percent), the chances that you will also get the benefit of any future reduction in interest rates are quite high.

So, if you have made a long-term commitment to a city, have the necessary down payment for the purchase and can make the EMI payments, you should go ahead and buy your dream home. After all, in the near future, your interest rate liability is likely to come down even further.

Source:, June 28, 2013

To purchase Properties in Delhi NCR, Email us.


About Saviour Builders

Saviour Builders Pvt. Ltd. is one of the leading real estate developers in Delhi NCR. The Saviour Group is the tantamount to deliver contemporary quality amid excellence and diverse innovation. It has emerged as one of the prominent entities in the real estate sector of India and is into residential, commercial and township projects in and around Delhi NCR. The Group devotes its complete dedication to reach higher and build better. With its immense hard work and loyalty, Saviour has accomplished the dream of delivering various tremendous infrastructures round the city. We intend to provide you with affordable houses in the Delhi NCR region. Some of its significant projects like Saviour Greenisle, Saviour Park, Saviour Street, Gaur City -1, Gaur City -2 and many more have created a new benchmark within the trade. Today, we have our presence at Noida, Noida Extension, Greater Noida (West) and Ghaziabad. We, at Saviour, are building homes based on trust and you are invited to build your future with us. We help you live your dream of living in style.

Posted on June 28, 2013, in Real Estate and tagged , , , . Bookmark the permalink. Leave a comment.

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