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Will the Rising Home Loan Rate Have an Impact on Home Buying Kolkata?

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The article focuses on the possible impact of rising home loan interest rates on the ordinary middle class buyers in the process of buying a Kolkata apartment. Is it really a good time for buying an apartment?

Building a home is a dream come true experience for most. People spend years saving up and collecting money to make the house they always dreamt of. Buying an apartment in a big city demands the incorporation of a big amount of capital, of proper and extensive planning and finally a lot of other associated factors. A home loan is what comes as a rescue to many buyers. It is with the aid of a home loan, that a person with a regular, stipulated income can afford buying a Kolkata apartment. There are quite a number of advantages availed, if one opts for a home loan for buying a Kolkata flat. A regular payment of interest makes it easier for the buyer to invest instead of having to pay a bulk amount at a time. apratment_kolkata.jpg
In the present scenario however, home loans come with a tricky association. Inflation and rise in prices have lead to increase in home loan interest and all of a sudden, it has become pretty difficult for buyers to cope with the rising price tag.

Mr. Kunal Baranwal, a government employee booked an apartment last year and took a home loan of about Rs 5 lac. The interest rate has risen by 5% while there has been no increase in income. “ It was fine for me, till even two months back, but all of a sudden, it is too much for me to pay this much amount. There has certainly been no increase in my income, or my wife’s income. We have added on the expenditure and have children to take care of and thanks to inflation; my entire budget is going topsy-turvy because of this rise in rate. It is a little too much to handle.”

The Central Bank of India hiked its borrowing and lending rates. Apart from the property prices being sky high, the most being in Delhi and Mumbai, the interest rates are rising pretty fast and high, battering all those who are already affected by inflation.

Mrs. Sengupta says, “We used to live in Kochi. Buying a Kolkata apartment was always a dream. My parents lived here, so I saved up money, took a home loan of about US $40000, and now almost 75% of me and my husband’s salary go into paying back of loans. I have two daughters whose education costs me quite a lot and to top it off, prices are rising like the heat these days. I have no clue, what to do to balance everything.”
Banks are saying that there is always the option of extending the tenure of the loan for the customers. They can try extending it so that it helps to ease out the burden to a certain extent, but the customers complain, that the price hikes are pretty sharp and even extending the tenure would not be helping much. Rather, it would be a burden for some time longer.

Many leading banks of the nation have already hiked their interest rates by a 0.5 %. This rise took place, post the short term key rates hike by Reserve Bank of India, in its annual credit policy. This hike took place on the 3rd of May and since then, the banks like ICICI, the Punjab National Bank, Oriental Bank of Commerce, etc. With such growing rates, it is undoubtedly getting difficult for the general mass to cope with the requirements and the necessities. With inflation the living cost of a regular family in a city had raised by huge rates and with rise in the home loan interest rates, it will be just an addition to the already existing woes.

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