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Vashi2Panvel.Com: Navi Mumbai: July 27: The rise in interest rates have forced banks and housing finance companies to adopt multiple strategies to pass on the effect of the rate hike to the customers. They are now increasing the equated monthly instalments (EMIs) of their floating rate home loan customers, while reducing the tenure of the loan period. This mount in the loan rates can demotivate many of the prospective buyers in the city.

This change in the loan rates may transform the minds of the people who are interested in property building. On speaking to Sampat Dahigude, the marketing manager of the Haware builders we found that Navi Mumbai is not much affected by this hike in the loan rates. “The customers who are salaried class are the ones going for the loans mostly, but this hike has till now not affected our business,” he explains. “We are getting the same response even now,” he adds.

Rekha More of Creative group feels that most of the people have either taken on their own full payment or they have gone for the fixed mode of repayment of the loans. “This hike has not affected much of the customers presently. We cannot say the situation after next 2-3 months,” she avers. On contacting National developers, Surinder Mehta informs us that it is too early to react on this, as it will depend how we get the responses in the next few months. “The present situation is such that those who have already booked the flat have not cancelled it till date even after the raise,” he adds.

The major concern is that banks have changed the policies and now they don’t follow the earlier practice of extending the tenure of the loan and keeping EMIs unchanged. Many banks have sent letters to floating rate home loan customers, informing them that the EMI has been hiked and either the tenure has been kept constant or reduced. However, in case the customer prefers to keep the EMI at the existing level and maintain the tenure of the loan, they have also been given the option of making a part pre-payment of the loan to bring down the principal outstanding. Many banks have also adopted a similar practice for a small percentage of their floating rate customers.

The class, which will change their decision after this hike is most probably the middle class salaried group for whom a raise of 1000 in their monthly EMI makes a lot of difference. “We were planning to buy a home in Vashi but this recent hike in the rates has made us to reconsider our decision,” says Mr. Pradeep Saxena who is a Kharghar resident and runs his own business. “The main point of concern here is the change in the rules of the bank in which they hike the EMI’s rather than increasing the duration of the loan repayment,” he adds. There are many others who hold a similar opinion on this issue. “I think it is very tough for a salaried employee to take on this hike as even thousand rupees make a lot of difference for him. He has a fixed budget and have to fix his expenditures in to it,” opines Manoj Tripathi, who is an employee with HLL and a Vashi resident.
The changing scenario of the policies of home loans may affect the real estate business in the city in the coming days. But, the real impact of this will be seen only after a few months with the change in the number of people interested in the business.

Smriti Mishra