Next on government's agenda: Home Loan EMIs cheaper than House Rents!
Home Loan EMIs vs House Rent: Finance Minister Arun Jaitley on Thursday said that the government aims to bring the loan rates to a level where paying EMIs could become cheaper than the monthly house rents.
Home Loan EMIs vs House Rent: Finance Minister Arun Jaitley on Thursday said that the government aims to bring the loan rates to a level where paying EMIs could become cheaper than the monthly house rents. In an interview to Hindustan Times, Jaitley recalled former Prime Minister Atal Bihari Vajapyee's reign when home loan rates had become cheaper. Jaitley said that then (in Vajpayee years), home loans had become "so cheap that EMIs cost less than renting a house". The government wants to take the interest rates to that level, he said.
Currently, India's leading lender State Bank of India is offering home loans at 8.65% per annum. "The mean interest rate for Home Loans for the quarter ended December 2018 is : 8.6979," says SBI official website. HDFC Bank is offering home loans at 8.85% to 9.35% for loans up to Rs 30 lakh. The bank offers a discount of 0.5% to women.
During the Vajpayee years, the SBI home loan had gone up to 7.75% on floating loans for a period of five years in 2003. In the same year, the SBI rate for home loans on tenures above 10 years was 8.50%.
Jaitley also said that the BJP-led NDA government will continue to stick to fiscal prudence and lower tax rates if it is voted to power
SBI Home Loan rates during 2002-2004
|From||To||SBMTLR||Up to 5 years||> 5 years up to 10 years||above 10 years|
|01-01-2004 - PB/19A/1002 dt. January 7, 2004||28-11-2004||SBAR 10.25%||Floating||7.50%||8.00%||8.25%|
*Source: SBI website
Next on Agenda: GST cut on cement
Speaking at an industry event, Jaitley said the Goods Services Tax (GST) rate reduction in cement would be the next on agenda of the GST Council. The finance minister said there is a need to maintain growth momentum for the next decade. If re-elected to power, the NDA government would continue with fiscal consolidation and also pursue policies to enable further reduction in interest rates.
PM Narendra Modi-led Union government is seeking a second term. Voting for Lok Sabha elections 2019 will start next week. The result will be out on May 23.
Jaitley said the government would look at reducing the GST on cement. After a number of GST cuts in the housing sector, cement is the item left in the 28 per cent tax slab.
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RBI cuts rate
For the second time in two months, the Reserve Bank of India cut interest rate by 25 basis points. The rate cut will likely lead to a fall in loan EMIs. The RBI has also lowered GDP growth forecast to 7.2 pc for 2019-20 from the earlier estimate of 7.4 per cent amid probability of El Nino effects on monsoon rains and uncertain global economic outlook.