interest rates home loan down to a record low

financeInterest rates of housing loans have fallen to the lowest level in a scaled down that gives hope for realtors booming real estate market after a prolonged slump. A boom in real estate will spin-off many allied industries such as steel, cement, rod, brick, tile, fixtures and so on, according to experts. Following the emergence of a highly competitive credit market, commercial banks have reduced lending rates for other personal loans, including car loans. money market sources said adequate liquidity to banks and non-bank lenders generates a pulse to go to the aggressive lending rates as cheap as possible, especially in real estate in high demand. Private commercial banks and non-bank financial institutions (NBFIs) involved in home loans cut rates from 2.0 to 3.0 percent in recent weeks, particularly effective for the month of February. The interest rate on home loan by some private commercial banks came down to one digit– 9.0 to 9.50 percent – people with direct knowledge told the FE. Housing construction of state-owned Finance Corporation (HBFCs) with lending rates at 12 percent of Dhaka and 10 percent for other districts until recently was the cheapest provider of home loan. The HBFCs, it is feared, is now facing a very difficult time in their business operations. Lending rates charged by the NBFIs also fell 10.50 percent to 11 percent, also by 2.0 to 3.0 percent of the above types. The interest rate charged on loans for home or property was about 14 percent on average with banks. The difference between the rates of commercial banks and non-bank financial institutions’ remains at around 1.5 percent to 2.0 percentage points. Executives at most of the banks and non-bank financial institutions have yet to adjust their lending rates downward they told the FE that they would revise the rates shortly. Many consider trimming for example as a result of cuts in policy rates in the last monetary policy statement announced for the period from January to June. To attract real estate loans, many banks are also taking over the loans owed to other banks and NBFIs borrowers in lower-rated interest. Selim RF Hussain, President and CEO of BRAC Bank, told the FE with adequate liquidity to lend and they would go for aggressive banking. “We will compete aggressively in the real estate market going forward,” he said of the changes taking place in the field of banking in the current context. Nurul Amin, a senior banker and manager of Meghna Bank director, said: “We are now in a reduction spree.” This, he said, is due to excess liquidity with banks. Banks are looking for safe areas and potential investment. He also said that investment in property has some technical advantages over other forms of investment. “Look, the supply is low investment property as a basis for provisioning is low,” he said. He noted that home prices have declined and now stands at rational levels by encouraging banks to reduce the interest rate on loans to property. Amin, who had served the NCC bank director in the past, said his bank also reduced to a plain 12 percent of the previous rate of 14 percent. Llano means no processing and other charges for the disbursement of loans. There are some banks charge 9.0 to 9.5 percent depending on salaried professionals and non-employees for the purchase of apartments and houses. BRAC Bank became the first lender to bring down the interest rate to 9.0 percent. The private bank is offering the Grameen Phone package. The other local and multinational private banks are also reducing their rates. Some are only about BRAC or some just higher on it. “This court will give a relief to applicants for home loans,” said an official at Standard Chartered Bank. Mohammad Ali, executive vice president of investment management at the largest private commercial bank– Islami Bank Bangladesh, told the FE, “We will reduce the rate of home-loan to 12 percent from next month [March]. ” Moreover, non-bank financial institutions are also at war in reducing the rate of investment at home and at home. Usually, DAP (Delta Brac Housing), an NBFI dedicated to home loan and IDLC Lanka Bangla invest in real estate. “Now we are charging as low as 10.5 percent,” said Tareq Ahmed SA, minister of finance in the IDLC Finance. However, people in real estate and housing said such cuts in lending rates will help boost the sector. But they said the willingness to question the sources of money must be removed to give the sector a real boost. Tanveerul Haque Probal, manager of Building for the future director, said: “This is a good sign [to boost the property market].” He expressed the hope that this would help the vibrant sector was deaf since 2008. “We are still to get the results of the rate cut, but it hopes to soon,” he said. home loan is usually long-term and banks and nonbank financial institutions lend up to Tk 10 million, from Tk 500,000. According to REHABILITATION (real estate and housing association of Bangladesh), the real estate and allied sector contributes to the economy of 7.2 per cent or around Tk 250 billion. Rehabilitation conducted a study in 2012 that found an estimated flats for three years until 2015 around 75,000 to 100,000 demand. In 2017, demand will grow to about 90,000 to 125,000, as a vast majority of the inhabitants of cities still do not have a proper roof over your head and live in rented homes dearly. By 2022, the hunt for the home will be moderating around 70,000 to 95,000.