NHB expects fall in home loan rates by January

According to the National Housing Bank (NHB) interest rates on home loans are expected to slope down from January.

In an interview to the The Telegraph S. Sridhar, chairman and managing director of the NHB, told, “Interest rates are likely to come down from January and we expect the home loan rates to fall after that.”

He said after the Reserve Bank of India hiked the interest rates there has been spurt in home loan rates. “We expect home loans to stabilize to around 10 per cent in the near term.”

Sridhar informed that there has been increase in the disbursal of home loans and the rising interest rate had not affected it.

In the last fiscal year, there was a healthy growth of 20 per cent in home loans. Whereas disbursal of home loans by banks was about 14-15 per cent, loans from financial companies grew 24 per cent.

“This year, too, the trend appears to be similar, but it is too early to form a definitive view,” he said.

Sridhar said the bank has launched NHB Residex to keep check on residential property prices in Delhi, Calcutta, Mumbai, Bangalore and Bhopal.

He said 10 more cities will be added in the list in the next two months and over 60 cities will be covered over the next two years. The index would be revived every six months, to get a good idea of the property prices in the country and city-specific realty movement.

Recently NHB has picked up a 12.5 per cent stake in Mahindra Rural Housing Finance Ltd, a wholly owned subsidiary of Mahindra and Mahindra Financial Services Ltd, but the amount has not been disclosed, and will continue to focus on rural housing finance.

Sridhar informed bank will soon be launching fixed deposit products and the capital will be used to fund rural homes

“We are studying the market condition. We will launch fixed deposit products soon. Given our changed focus to facilitate rural housing and growing business in terms of loan refinancing and direct project financing, we have decided to mobilize public money through fixed deposits,” he said.