Indians pay too much interest on home loans, reveals study

A study conducted by India Mortgage Guarantee Corporation (IMGC)-Kantar IMRB revealed Indians have to pay too much housing loan interests, which makes them reluctant to take loans and dig into their savings in order to own a house.

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The study also showed that people in the age bracket of 25 to 44 years in smaller towns are much more interested in affordable housing as compared to their counterparts in metros and mini-metros.

"Housing sector is poised for a higher growth, especially in affordable housing segment by the Housing-for-all by 2022 Mission and infrastructure status accorded by government, apart from various other measures," said Sriram Kalyanraman, MD&CEO, National Housing Bank.

Out of the people surveyed, around 38% said that interest rates on housing loans are too high, while an equal number of respondents said that they don’t own a house owing to low savings and hesitation in taking loans.

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Other than these, factors like higher property rates (32%) and insufficient loan availability (32%) too contribute in discouraging home buying plans.

Talking of the effects of demonetisation, Kalyan said that because of alternative currency going out, property rates have fallen.

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The survey, which was conducted in two phases, had a sample size of about 4,100 respondents from metros, mini metros and towns combined. The respondents, divided into 25-34, 35-44 and 45-55 years age groups, either had home loans or had applied for the same.

(Image source: Finance Buddha)