Decreasing Home Loan – Big Thumbs up to Own a House Instead of Living in Rent

Posted by Admin @ TataNewProjects on January 17, 2017

People often get scared after looking at the prices that was just nailing the market, but still everyone wants to own a house even knowing that it involves big money. The increase in the price of Real Estate in Indian cities in the last decade has been unexpected. There was more than 300% rise in real estate prices in bulbous urban cities in India and about 100% rise as an average on a global scale.

The real estate market in India has been very suspicious and dense. Contrary to the price elasticity, price increased tremendously and the main reason behind it was embroil of black money. Such high prices forced people to live on rents rather than buying it.

Owning a house is like a night mare for many but, a big question 2016 activities has raised, whether 2017 will be the year of investment? Whether people can own a house in this year or still they will live on rents?

Why and how this black money was circulating in Real Estate?

There has been always an organized framework, that how money laundering works in real estate. The property is purchased by companies with cash- cheque at low price, then they are resold at 4 times in few months, which can also be done by multiple cash deposits. Finally everything settles down and nearly 30-50% of the price was paid in black. Then the flat is sold and recorded near to the circle rate where black money remains unaccounted.

In this whole scheme, a salaried person suffers the most where the large section of his salary was eaten by the house rent, if earning is enough to own a property then the broker fee, tax and bla bla bla…. they just took them off all the hopes. In addition to this, one more headache for them is taking a loan on which the high interests just break them and with it the unknown fear of recession and job security. All these factors away the salaried man from purchasing his own house.

Some of the steps, which will be a big helping hand in making possible owning instead of rented living:

  • For black money holders, the last two months of 2016 has been like a night mare where the real estate market stood in panic situation. In the last few years the selling of flats has been less because of the high price but the strong real estate bill and the capped cash transactions will led to the downfall.

Nearly, 30-50% fall in the prices have been seen especially in the Delhi NCR area and in the coming months this will come down more and Real Estate will bust up the market. Demonetization has clearly cut down 86% value of the cash and has freeze the black money loop straight away lowering down the price by 30% and to improve the situation RBI will also cut the interest rates on loans.

  • Recently on New Year, P.M. Narendra Modi broadcasted few new housing schemes boosting common man to own a house either in rural or urban area. This would lay a big help for the middle class people to own a house instead of spending their life on rents.

For Urban Areas, two housing schemes has been launched under Pradhan Mantri Awas Yojana:

  • In the first scheme home loan, borrower will get 4% interest subvention for up to 9 Lakhs rupees
  • In the second scheme it will be 3% interest subvention for up to 12 Lakh rupees

Also in rural areas, people who want to reconstruct their houses can borrow 2 Lakh rupees on 3% interest subvention.

  • Prime Minister and 2017 has come up as a new hope which might act as a boom year for the investors. He asked SBI, PNB and UBI to reduce the lending rates up to 90 basis points.

The country’s biggest lender, SBI, has decreased Marginal Cost of funds based Lending Rate (MCLR) by 0.9 per cent from 8.90 per cent to 8 per cent for one-year tenure, where PNB has cut its one year MCLR rate by 0.7 per cent to 8.45 per cent from 9.15 per cent. Similarly, Union Bank of India has decreased its MCLR by 0.65-0.9 per cent to 8.65 per cent.

  • Reports of ET Now says, that the central government is pondering a new housing scheme that may use the money from the demonetization drive and accordingly, the govt. has started working on this scheme with RBI. It might be announce in the Union Budget 2017 which is expected to be out on Feb 1.

On the back of inflation data and the slowing growth rate, the Reserve Bank of India (RBI) deducted the repo rate by 0.25% on Tuesday, while keeping the Cash Reserve Ratio unaffected. Now, from 6.5%, the repo rate stands at 6.25%.

2016 has been the period of revolution which has somewhere opened up the doors that people can invest in 2017 and finally they can think to buy a home. Till 2016, it was better to opt renting because of the ultimate high price but instead of paying rent every month you can pay that money as a loan EMI.

Why to buy a house instead of living on rent?

The most important why as a nationalist owning a house is better than rented accommodation, is within 10- 15 years of time span we certainly create an asset and we can bestow to our children.

Suppose if you are living in 2BHK or 3BHK house, it’s minimum rent will be 20K, and in rented house somehow you need to shift after months or years, does it make any sense that shifting again and again with all your belongings even after paying such high rents, instead you can take loan and pay its EMI which you are giving in rent, and can take own it.

Another advantage of your house is that its capital value appreciates over years and with no doubt, among all the assets, property gives the highest return over and over again.  On that note, you can go for Tata Value Homes, which is being uplifted by Tata Housing, well- known builder of Real Estate. Here, you can get extreme of happiness in your affordable price.


 In order to boost the housing sector, this rate cut might lead to a good borrowing environment.

“Low interest rates + High demand for mortgages= An uptick to buy a house”