Home loans above Rs 75L account for 30% of new loans

Synopsis

The home loan landscape is experiencing a shift from the affordable housing sector to more upscale residences. Home loan data shows a notable change in value and volume, with a shift from Rs 5 lakh to Rs 35 lakh to Rs 35 lakh to Rs 75 lakh. Loans above Rs 75 lakh now make up 30% of the total, while loans between Rs 35 lakh and Rs 75 lakh account for 31.4%.

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Latest home loan interest rates.

Indications suggest a transition in the home loan landscape, with a shift from the affordable housing sector to more upscale residences. The average home loan amount has experienced a 22% surge, rising from Rs 20.2 lakh in FY20 to Rs 24.7 lakh in FY23, as per a Times of India (ToI) news report

As per home loan data analyzed by the credit bureau CRIF High Mark, there is a notable change in both the value and volume of home loan originations. The shift is observed from the range of Rs 5 lakh to Rs 35 lakh towards the bracket of Rs 35 lakh to Rs 75 lakh. The data indicates a distribution in new mortgage originations during April-June 2023, with loans surpassing Rs 75 lakh making up almost 30% of the total. Meanwhile, loans falling within the Rs 35 lakh to Rs 75 lakh range constituted 31.4% of the newly originated mortgages. Those below Rs 35 lakh accounted for less than 37% of the total mortgages, stated the ToI news report.

Also read: Cheapest home loan interest rates for amounts above Rs 75 lakh: PSU banks vs private banks

In comparison, in FY20, only 19% of loans were above Rs 75 lakh, while 28% were between Rs 35 lakh and Rs 75 lakh. The bulk of the loans (53%) were below Rs 35 lakh in FY20.

As per the “How India Lends” report unveiled by the credit bureau, the outstanding portfolio of home loans reached Rs 30.7 lakh crore as of June 2023, marking a 15% increase compared to the preceding year. Despite the value of new loans originated in FY23 amounting to Rs 9.1 lakh crore, reflecting an 18% rise from the previous year, the actual number of loans experienced a growth of only 13%, totaling 37 lakh.

The results align with the trends observed by major home loan providers, such as the erstwhile HDFC. According to HDFC’s data, 53% of its loans, in terms of value, were extended to the high-income group in FY23, a substantial increase from the 26% recorded in FY20. Concurrently, the share of the low-income segment in value terms declined from 16% in FY20 to 9% in FY23.

Latest home loan interest rates January 2024

Name of Lender Loan Amount (Rs)
Upto 30 Lakh (%) Above 30 Lakh & Upto 75 Lakh (%) Above 75 Lakh (%)
PUBLIC SECTOR BANKS
State Bank of India 8.40-10.15 8.40-10.05 8.40-10.05
Bank of Baroda 8.40-10.65 8.40-10.65 8.40-10.90
Union Bank of India 8.35-10.75 8.35-10.90 8.35-10.90
Punjab National Bank 8.45-10.25 8.40-10.15 8.40-10.15
Bank of India 8.30-10.75 8.30-10.75 8.30-10.75
Canara Bank 8.50-11.25 8.45-11.25 8.40-11.15
UCO Bank 8.45-10.30 8.45-10.30 8.45-10.30
Bank of Maharashtra 8.35-11.15 8.35-11.15 8.35-11.15
Punjab and Sind Bank 8.50-10.00 8.50-10.00 8.50-10.00
Indian Overseas Bank 8.40 onwards 8.40 onwards 8.40 onwards
Central Bank of India 8.45-9.80 8.45-9.80 8.45-9.80
PRIVATE SECTOR BANKS
Kotak Mahindra Bank 8.70 onwards 8.70 onwards 8.70 onwards
ICICI Bank 8.75 onwards 8.75 onwards 8.75 onwards
Axis Bank 8.70-13.30 8.70-13.30 8.70-9.10
HSBC Bank 8.45 onwards 8.45 onwards 8.45 onwards
South Indian Bank 9.84-11.24 9.84-11.04 9.84-11.69
Karur Vysya Bank 8.95-11.00 8.95-11.00 8.95-11.00
Karnataka Bank 8.58-10.58 8.58-10.58 8.58-10.58
Federal Bank 8.80 onwards 8.80 onwards 8.80 onwards
Dhanlaxmi Bank 9.35-10.50 9.35-10.50 9.35-10.50
Tamilnad Mercantile Bank 9.45-9.95 9.45-9.95 9.45-9.95
Bandhan Bank 9.16-15.00 9.16-13.33 9.16-13.33
RBL Bank 8.90 onwards 8.90 onwards 8.90 onwards
CSB Bank 10.69-12.54 10.69-12.54 10.69-12.54
HDFC Bank Ltd. 8.35 onwards 8.35 onwards 8.35 onwards
City Union Bank 12.35 – 14.10 12.85 – 14.60 13.35 – 14.85
HOUSING FINANCE COMPANIES (HFCs)
LIC Housing Finance 8.35-10.35 8.35-10.55 8.35-10.75
Bajaj Housing Finance 8.50 onwards 8.50 onwards 8.50 onwards
Tata Capital 8.70 onwards 8.70 onwards 8.70 onwards
PNB Housing Finance 8.50-14.50 8.50-14.50 8.50-11.45
GIC Housing Finance 8.80 onwards 8.80 onwards 8.80 onwards
SMFG India Home Finance 10.50 onwards 10.50 onwards 10.50 onwards
Indiabulls Housing 8.75 onwards 8.75 onwards 8.75 onwards
Aditya Birla Capital 8.80-14.75 8.80-14.75 8.80-14.75
ICICI Home Finance 9.20 onwards 9.20 onwards 9.20 onwards
Godrej Housing Finance 8.55 onwards 8.55 onwards 8.55 onwards
Rates as of 24th January 2024
Source: Paisabazaar.com


Also read: Factors other than your income, credit history lenders consider before giving you a home loan

ToI said bankers have attributed the rise in the value of loans to two primary factors. Firstly, there has been a shift in preference towards larger houses in the aftermath of the pandemic. Secondly, although demand for affordable housing has seen a decrease, the demand for premium houses has remained stable. Additionally, housing prices have surged in many regions across the country due to the uptick in demand.

There has been a minor uptick in delinquencies, with the portfolio at risk in the 91-180 days overdue category increasing to 0.8% in June 2023, up from the previous 0.4%. However, delinquencies remained stable at 2.1% in the 31-90-day category, and there was a slight decrease to 1.5% from 1.8% in the 360-day past-due category.

Home loans are dominated by public sector banks and private banks (by value and volume). While housing finance companies and public sector banks dominate the segments below Rs 75 lakh, private banks lead the Rs 75 lakh-plus home loans.

Also read: How to apply for home loan, calculate cost, pre-close

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