4 reasons why current home loan interest rates shouldn’t intimidate you.

Often, it’s home loan interest rates that cause most potential borrowers to drop the idea of a home loan. Worried that this cost will shake their financial stability, they either drop the idea of buying a new home or decide to save up and purchase the home on their own financial capacity. However, this article will highlight 3 major reasons why you should be intimidated by the interest rates applicable to a home loan and go in for a home loan to buy your dream home.

1. Home loan interest rates are at an all-time low!

That’s right; there has never been a time in home loan history where the interest rates have been lower than what they are currently. In one way, you could say that there has never been a better time to take a home loan to finance your purchase decision and upon approaching lenders, you should be offered interest rates ranging between 8.35 and 8.95 percent per annum.

2. You can now avail subsidies on home loan interest rates

The Government of India has introduced what’s known as the ‘Pradhan Mantri Away Yojana Credit Linked Subsidy Scheme’ or PMAY CLSS in short to ease the financial burden of a home loan for potential borrowers. Under this scheme, you can avail interest subsidies and save a substantial amount of money!

For example, as long as you have a household income that’s under Rs.18 lakh per annum, you are eligible for interest subsidies up to 6.50%. This subsidy allows you to save up to Rs. 2.67 lakh against your home loan!

3. Home loan interest rates help you save taxes.

If there’s one thing that get people more frantic than home loan interest rates it is the taxes they have to pay annually. But, if you have a home loan, you can avail a couple of handy tax saving benefits. First under section 80C of the Indian Income Tax Act, 1961, the principal repayment of your home loan can be used to avail tax deduction up to a maximum amount of Rs. 1, 50,000 annually.

Moreover, the housing loan interest you pay annually can also be used to claim valuable deductions up to a maximum of Rs. 2, 00,000 annually under section 24 of the Income Tax Act.

4. There are numerous ways to reduce the interest rate & interest payable.

Apart from the above three-pointers, you can also employ numerous methods to reduce either the housing loan interest rate applicable of the overall interest payable.

For example, working on your credit score can help you negotiate better interest rates and even if the reduction is tiny, it will help you save a considerable amount of money over the tenure of your housing loan. Moreover, if you save for a bigger down payment, make prepayments and direct any windfall gains to the repayment of your home loan, you can cut down on the overall interest payable considerably.

So there you have it, 4 reasons why current home loan interest rates shouldn’t intimidate you. You should consult a financial advisor to explore the benefits of using any of the above pointers to your advantage.

Hi, I am Anurag Mishra working with Home Finance company as Home Loan adviser owing good knowledge of Home loan, Home Loans, Home Loan Balance Transfer, Mortgage Loan, Property Loan and Personal Loan so on.