When will home loan rate fall?

Though Punjab National Bank and IDBI Bank announced a cut in home loan rates this week, home loan customers of major banks may have to wait for some more time to see relief coming to them. Banks are expected to come out with a downward revision in their rates in the next one or two months as most of the recent loan sanctions are yet to materialise into disbursements.

Another reason which is delaying a cut in home loan rates is the high deposit rates of up to 11 per cent being offered by banks. When lending rates are lowered, deposit rates will also come down. Moreover, the banking system needs more liquidity and it will take some weeks for the liquidity to trickle down into the system.

Floating home loan rates had gone up from around 7.50 per cent to 11.50 per cent in three years, severely hitting plans of home buyers.