on Aug 27, 2021)Mumbai: There has been a 42% rise in borrowers engaging in home loan balance transfers in the first half of the calendar 2021 as compared to the preceding six months of July-December. As against this, home loan requests have registered an increase of 26% in the first half.
According to a Magicbricks Home Loans Consumer Study, the balance transfer requests have increased because of a dip in interest rates. “The soaring demand has been triggered largely by the fact that the Reserve Bank of India (RBI) has kept the repo rate unchanged at a constant 4%, allowing many banks to offer interest rates of less than 7% for home loans. This has also been a key driver in augmenting the demand for home buying,” the report said. In terms of the demand for balance transfers, New Delhi, Bengaluru, Mumbai, Pune and Hyderabad were the top five tier-1 cities. Among tier-2 cities, Ghaziabad, Mohali, Noida, Indore and Visakhapatnam were the top five. Borrowers opt for a balance transfer when they feel that they can bring down their interest rates by switching to a new contract. An increase in the number of balance transfer requests also reflects a growing level of awareness.
Magicbricks is part of the Times Group, which publishes the TOI. “Almost 50% of the borrowers opt for tenures less than 15 years. With factors like low interest rates, stable prices and attractive payment plans, we are hopeful that the pent-up demand would soon translate into sales,” said Magicbricks CEO Sudhir Pai.
In addition to growth in loans for new home purchases and balance transfers, loans against property has also seen a growth of 20% because of the low rates. For loans against property, Bengaluru, Hyderabad, Chennai, New Delhi and Pune saw the most demand across tier-1 cities, and Gurgaon, Jamshedpur, Patna, Faridabad and Lucknow for tier-2 cities.Another finding from the report is Bank of Baroda, Indian Bank, SBI, HDFC and ICICI Bank are the most searched lenders on Magicbricks’ home loans platform.
