December 4, 2023: The Reserve Bank of India (RBI) may maintain a status quo on key policy rates for the fifth time in a row, indicate industry experts and private polls. The banking regulator will announce the policy rates on December 8, 2023. The MPC meeting is scheduled for December 6-8, 2023.
The RBI charges 6.5% interest from banks in India to lend funds. This interest is known as the repo rate in banking parlance.
After increasing the key benchmark lending rate by 250 basis points (bps) or 2.5% cumulatively since May 2022, the RBI first decided to hit the pause button in April 2023. The repo was last increased in February this year, from 6.25% to 6.50%.
“The high growth witnessed in the second quarter in GDP (Gross Domestic Product) will provide assurance that the economy is on track. The low core inflation numbers in the last few months will provide comfort that there is no need to increase rates even while headline inflation is likely to be volatile in the upward direction,” Madan Sabnavis, Chief Economist, Bank of Baroda, told news agency PTI.
India’s GDP grew at a higher-than-expected 7.6% in the July to September 2023 quarter, initial estimates by the National Statistical Office show. On the other hand, headline retail inflation rate eased to a five-month low in October while Consumer Price Index-based inflation eased to 4.87% in October from 5.02% in September 2023.
How will the move impact real estate?
If the RBI leaves the repo rate unchanged in its December policy, it will ensure home loan interest rates remain stable, a move that would augur well for the real estate sector in India. Driven by unprecedented levels of demand, the sector has achieved consistent levels of growth in the past one year. Homebuyers can avail of housing loans at 8.25% annual interest at present
Cheapest home loans in India in December 2023
| Bank | Interest rate for customers with best credit score | Lowest interest | Highest interest |
| HDFC Bank | 8.5% | 8.5% | 9.40% |
| LIC Housing Finance | 8.5% | 8.5% | 9.70% |
| Indian Bank | 8.5% | 8.5% | 9.90% |
| Punjab National Bank | 8.25% | 8.25% | 10.1% |
| Indusind Bank | 8.50% | 8.50% | 10.55% |
| Bank of India | 8.50% | 8.50% | 10.60% |
| IDBI Bank | 8.50% | 8.50% | 10.75% |
| ICICI Bank | 8.50 | 8.50% | 9.15% |
| Bank of Maharashtra | 8.60% | 8.60% | 10.30% |
| Bank of Baroda | 8.60% | 8.60% | 10.50% |
| State Bank of India | 8.70% | 8.70% | 9.65% |
| Union Bank of India | 8.70% | 8.70% | 10.80% |
| Kotak Mahindra Bank | 8.70% | 8.70% | 9.60% |
| Axis Bank | 9.0% | 9.0% | 9.40% |
| Canara Bank | 9.250% | 9.25% | 11.25% |
How to get the best rate?
The lowest rate offered by a bank is provided to a customer meeting specific eligibility criterion. These include:
Women borrowers: Almost all banks in India offer some incentive to women borrowers. All factors being equal, a woman borrower will pay less than a man.
Borrowers with good credit score: This is the single biggest criterion based on which banks decide to change interest rates.
Salaried applicants: Salaried customers are offered home loans at lower rates.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
sunita.mishra@proptiger.com
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