The Reality Of Real Estate Sector
Due to the pandemic, the Reserve Bank of India (RBI) has reduced the base rates in the market. Therefore, all the banks and non-banking financial institutions have reduced the housing loan interest rates to meet the guidelines. The reduction in interest rates, which leads to lower home loan EMIs, has increased the demand for retail real estate projects.
Moreover, emerging economies like India have seen an enormous inflow of funds in the real estate sector. The realty sector index in the Indian stock exchange has broken out after consolidating for almost 10 years. Also, the bull market has helped real estate companies to pay off their debts and keep sufficient cash reserves for the future.
Along with the listed real estate companies, major private companies have also seen an inflow of funds. Approximately US $220 Million have been invested via Private Equity (PE) in major private companies.
Therefore, the outlook for India’s real estate sector looks bullish. The increasing millennial population of the country will act as a catalyst to this increasing retail real estate demand. Moreover, with IT companies posting enormous profits, they are all set to hire record numbers in the coming few quarters. Therefore, this will increase the demand for offices as well.
Also Read: Are Home Equity Loans a Good Idea?
We are only considering urban city numbers. The development in the rural areas is much more important, as the trend of living in traditional families is currently shifting towards nuclear families. Now, the upcoming generation is focussing on moving out of their parent’s home. Therefore, the need for affordable real estate has to be created in rural areas as well. Bank’s and non-banking financial institutions are playing their part by offering low-interest rates on home loans. Government and other real-estate companies should focus on providing affordable residential properties in the rural parts of the country.
Moreover, if the inflation rate continues to rise, real estate is one of the best assets to hedge against inflation. Therefore, the value of your real estate property is going to increase in the coming few years. For individuals, who are buying real estate property for investment or personal use, managing finances is one of the most important tasks. To overcome it, lending institutions provide a home loan interest calculator.
How Can You Benefit From An Interest Calculator?
The home loan interest calculator is freely available on the lender’s website. With the help of this tool, you can easily make a monthly budget and plan your expenses accordingly.
Also, the housing loan interest calculator displays the results instantly and informs the exact monthly home loan EMI to the borrower. Moreover, it becomes easier for the home loan borrowers to decide the principal amount. Because the principal amount is directly related to the EMI. If the amount is higher, EMI would also be high. Therefore, by using the home loan interest calculator, borrowers will be able to determine the loan amount as per their budget. Once the loan amount is decided, it becomes easier for the borrowers to decide the down-payment amount.
You should also know that the down payment is inversely related to the EMI amount. If the down payment amount is higher, the lender’s confidence increases and the lending institution charges a low home loan interest rate to the borrower. Also, if the down payment amount is high then the loan amount would be lower. Thus, the EMI amount is also less.
The home loan interest calculator is used to save money on EMI payments. Therefore, it is always better to apply for the loan amount only as per your budget. Because any default in the payment negatively affects the borrower’s credit report.