Trends in the Housing Loan Market in India

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The Indian real property market has witnessed an unprecedented rise in the realty and land prices in the last ten years or so. In the present condition the best investment option most people would rely on is buying a home. Home is the safest investment because it is one of the few assets whose value appreciates over the years.Buying a home is not only a dream that people cherish life long, but it can also be a tax saving option as tax deductions are available on the purchase of a house if you apply for housing loans in India. Following the boom in the real estate market, a healthy competition can be witnessed in the housing finance sector, as more and more banks and financial institutions are entering the house loan market. The market is flooded by various housing finance schemes offered by these banks and financial institutions and the ultimate beneficiaries are the consumers as they have got plenty of options to choose from according to their requirements.The immediate impact of rising competition in the housing loan sector can be seen in the rates of interest charged by various banks. Most of the banks and financial institutions are offering housing loans at competitive interest rates and innovative house loan products. The standard interest rate in the market today is 8 to 8.5% per annum for a five-year loan. However, the terms and conditions for housing loans differ from one bank to the other.Housing loans in India are available for a number of reasons such as purchase, construction, expansion and renovation of house. So housing finance companies now offer individuals with various alternatives to choose from while taking a house loan. They offer loans for property investment like home purchase, home construction, home improvement, home extension, home equity and home conversion. Other housing loans offered by them are land purchase loan, stamp duty loan, balance transfer loan, refinance loan and others.Since the last five years, the real estate sector in India is getting organized. And it is being supported by an organized housing finance sector and with the increase in transparency levels, people are getting confident with the financing vehicles offered in the housing finance sector. As most housing finance companies have reduced their interest rates, this is probably the best time to buy a housing loan