Home loans are already the fourth largest contributor to India’s GDP. In the near future, their demand is only expected to increase. Here we examine why home loans are going to be big in 2020.

Property prices, currency, inflation are stagnant

The housing bubble is now at a standstill, with the rupee at a constant against the dollar. Property prices, however, are stagnant. Hence, it’s a good time for prospective homeowners to get a home loan and buy a house, now that they are reasonably affordable.

Interest rates lower

The RBI has recently cut the repo rate, and the lowered interest rate is expected to continue into next year. Major banks and financial institutions have cut their home loan interest rate by about 0.1%. The National Housing Bank has also directed banks to not levy prepayment fees anymore. The RBI is also planning to start a volatile interest rate system, which, while causing disturbances initially, should prove to be beneficial in the long run. Hence, interest rates levied by banks might be significantly higher than the base rate set by the RBI to account for and balance out the volatility.

Schemes like PMAY giving home loan market a boost

Housing has become more accessible and affordable than ever with the introduction of social welfare housing schemes such as the Pradhan Mantri Awaas Yojana (PMAY). Economically and socially disadvantaged classes, such as Middle and Lower Income Groups, Economically Weaker Classes, women, Scheduled Castes and Scheduled Tribes, physically disabled people, transgender people and so on will be allowed to avail subsidised home loans. Women will also be encouraged to become empowered homeowners as houses will need to be registered in their names.

Additional ReadHow to Apply for Pradhan Mantri Awas Yojana to Get Your Own House

Demand for home loan expected to go up

Demand for homes, and hence housing loans, has surged exponentially and this trend is expected to continue into next year. A combination of rapid urbanisation, increase in disposable income and savings, decreased interest rate, and a focus on the nuclear family demographic have all contributed to the rise in demand.

Fintech in home loans

Fintech, or financial technology, is making rapid strides into bringing home loans online and is instrumental in making housing finance more accessible. It uses big data to collect and analyse customer information to determine their home loan eligibility. Some of the features that make it a preferred option among borrowers are instant approval, online verification, and flexible loan amounts, and tenures.

Additional ReadComplete Guide For Buying a House For First Time

Move on to the next stage of your life and be a proud homeowner by applying for a housing loan at Tata Capital and get competitive home loan interest rates. You also get a wide range of home loans, with high eligibility, and easy repayment. Also calculate your EMI with Tata Capital’s online EMI calculator for home loan and home loan calculator. The home loan EMI calculator is accurate and fast, and helps you make an informed decision about your home loan plan. Stride into a bright future with a home loan from Tata Capital.

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