Budget bites favors Home Loan seekers
This budget has few proposals that benefit the home loan seekers. Borrowers have some scope as the Finance Minister has raised the slab for the one percent interest subvention scheme on home loans from Rs 10 lakhs to Rs 15 lakhs. This gives more opportunity to the prospective homebuyers as the qualifying cost of the house has been raised from Rs 20 lakhs to Rs 25 lakhs for the one percent interest subvention scheme.
Secondly, lower income tax means more disposable income thus can help the prospective home buyers to invest in their dream home. The impact per person should be around Rs. 2000 so, more cash for the EMIs. Also for those above the age of 80 years have a new exemption limit of Rs 5 lakhs.
There has been a reduction in the senior citizens’ age limit, now it is 60 whereas earlier it was 65, plus the added benefit of lower taxation. Thebudget 2011 has given the common man some saving on the household income front to plan a home loan. In fact with the rising home loan rates the reduction is bound to bring some relief to people who have already taken a home loan.
According to experts due to inflation, tightening measures are bound to kick in but no major liquidity crunch is on the cards – this means that the home loan interest rates are not likely to shoot up.
The homebuyer can go in for his dream home without having to stretch beyond his comfort level even in the light of further hikes in the key policy rates by the Reserve Bank of India (RBI) in its policy review meet next month. Interest rates on fixed deposits of banks have already been increased and the interest rates for senior citizens are even over the 10% mark.
The budget for 2011 is favorable for those planning to buy a home as there is no sign of significant increase of the home loan rates. The disposable household income in case of a joint family will go up plus the tax concessions on home loan repayment makes it a win-win situation.
Processing your request, Please wait....
