2 min
12 May 2025
When you plan to buy a home, interest rates play a big role in your decision. Home loan rates impact buying decisions in many ways. They affect how much money you can borrow and how much your monthly payments will be. This article looks at how home loan rates impact your home buying plans and what you need to know before you take the plunge.
Will reduced repo rates translate into lending rate cuts?
The Reserve Bank of India (RBI) sometimes reduces the repo rate, which is the rate at which banks borrow from the RBI. When this happens, people hope banks will also cut their lending rates. Home loan rates impact the housing market directly. When banks feel pressure to pass on these benefits, home buyers might see lower interest rates on their loans. However, banks do not always reduce their rates right away due to other factors like liquidity concerns.
Bajaj Finserv offers a competitive interest rate starting at just 7.99%* p.a. Check your eligibility today to see if you qualify for those rates. You may already be eligible, find out by entering your mobile number and OTP.
Will cuts in lending rate push prospective home buyers to take the plunge?
Many experts say that home loan rates impact buying decisions, but they are not the only factor. Buying a house is a big life decision, and small changes in interest rates might not push people to buy if they were not already planning to. However, these changes do affect how much loan you can get. For example, with Bajaj Finance offering rates starting from 7.99%* p.a., buyers can now qualify for larger loan amounts. The lower rates create positive feelings in the market and might give some buyers the final push they need.
Do low home loan rates mean it is a good time to buy a house?
Low home loan rates impact buying decisions in a positive way. When rates are low, your monthly payments go down, making homes more affordable. With EMIs as low as Rs. 722/lakh* with Bajaj Finserv, you can stretch your budget further. But you should not buy a house just because rates are low. You need to think about your job security, savings, and long-term plans too. Low rates are just one factor in deciding if it is the right time to buy. Check your loan offers from Bajaj Finserv to see how low rates could benefit you. You may already be eligible, find out by entering your mobile number and OTP.
Will property prices continue to rise?
Property prices have gone up a lot in the past few years. This happened because building materials cost more and there is a shortage of workers. How home loan rates impact buying decisions becomes even more important when prices are rising. If property prices keep going up fast, even low interest rates might not make homes affordable. However, many experts think price increases will slow down because people are finding it hard to afford homes. The job market has also slowed, making it harder for people to switch jobs for better pay. This means prices might stabilise soon.
Is it smart to use cash to prepay outstanding long-term loans?
If you have extra cash, you might wonder if you should use it to pay off your home loan early. Home loan rates impact this decision too. If your loan has a high interest rate, paying it off early could save you money. However, if you have a low-rate loan from Bajaj Finserv with rates starting at 7.99%* p.a., you might be better off investing that money elsewhere. You should also think about whether your property will go up in value. If it will, you might want to keep your cash for other opportunities.
Advice for individual investors in real estate right now
If you are thinking about investing in real estate, you need to plan carefully. Home loan rates impact buying decisions for investors too. Choose a reliable developer and a flexible lender like Bajaj Finserv that offers options based on your financial situation. Bajaj Finserv offers home loans up to Rs. 15 crore* with tenures up to 32 years, giving you the flexibility you need. Check your eligibility for a Bajaj Finserv Home Loan to see what options are available to you. You may already be eligible, find out by entering your mobile number and OTP.
Also, think about getting insurance equal to your home loan amount. This protects your family from having to pay off your loan if something happens to you. Remember that insurance is not always required with a home loan, so educate yourself on your options.
Strategies to manage interest rate changes
Home loan rates impact buying decisions and your long-term financial health, so you need good strategies:
Many things affect what interest rate you will get on your home loan.
1. RBI's monetary policy and repo rate
The RBI sets the repo rate, which influences all lending rates in India. When the RBI raises this rate, home loan rates typically go up too. When it lowers the rate, home loans can become cheaper. The RBI makes these decisions based on inflation, economic growth, and other factors. Bajaj Finserv offers externally benchmarked interest rates that move with the repo rate, helping you benefit during favourable market conditions.
2. Type of lender
Different lenders offer different rates. Banks, housing finance companies (HFCs), and non-banking financial companies (NBFCs) all have their own ways of setting rates. Bajaj Finserv, as a trusted lender with 3 lakh+ customers, offers competitive rates starting from 7.99%* p.a. for salaried individuals and 8.30%* p.a for self-employed professionals.
3. Credit score of the borrower
Your credit score shows how reliable you are at repaying loans. A high score (above 725) can get you lower interest rates. Bajaj Finance looks for a CIBIL score of 725 or higher for the best home loan rates. If your score is lower, you might pay more interest or even be denied a loan.
4. Loan amount and tenure
How much you borrow and for how long affects your interest rate. Bajaj Finance offers home loans up to Rs. 15 crore* with tenures up to 32 years. Longer tenures usually mean lower monthly payments but more interest paid overall. Shorter tenures often come with lower interest rates but higher monthly payments.
5. Loan-to-value (LTV) ratio
The LTV ratio is how much of the property's value you borrow. If you make a larger down payment, your LTV ratio is lower, which might get you a better interest rate. This is because the lender takes less risk when you have more of your own money invested in the property.
6. Type of interest rate chosen
The type of interest rate you choose affects your loan costs. Bajaj Finserv offers both fixed and floating rates. Fixed rates stay the same, giving you predictable payments. Floating rates can go up or down with the market. Floating rates often start lower than fixed rates but can change over time. Check your loan offers to see which option is best for you. You may already be eligible for competitive rates, find out by entering your mobile number and OTP.
7. Property location and age
Where your property is located and how old it is affect your interest rate. Newer properties in good areas usually get better rates because they are less risky for lenders. Bajaj Finserv has 5,000+ approved projects that can help you get a quick loan approval within 48 hours*.
8. Employment and income profile
Your job and income affect your interest rate too. Salaried people often get better rates than self-employed people because their income is more stable. Bajaj Finserv offers rates from 7.99%* p.a. for salaried individuals and from 8.30%* p.a for self-employed professionals and doctors.
How to apply for Bajaj Finserv Home Loan
Getting a home loan from Bajaj Finance is easy. Here is what you need to do:
Eligibility criteria to get home loan from Bajaj Finserv
To get a home loan from Bajaj Finserv, you need to meet these criteria:
Conclusion
Home loan rates impact buying decisions in many important ways. They affect how much you can borrow, what your monthly payments will be, and how much your loan will cost over time. With Bajaj Finserv offering interest rates starting from 7.99%* p.a., EMIs as low as Rs. 722/lakh*, and loans up to Rs. 15 crore*, now might be a good time to consider buying a home.
Bajaj Finserv also offers several benefits that make their home loans attractive:
Will reduced repo rates translate into lending rate cuts?
The Reserve Bank of India (RBI) sometimes reduces the repo rate, which is the rate at which banks borrow from the RBI. When this happens, people hope banks will also cut their lending rates. Home loan rates impact the housing market directly. When banks feel pressure to pass on these benefits, home buyers might see lower interest rates on their loans. However, banks do not always reduce their rates right away due to other factors like liquidity concerns.
Bajaj Finserv offers a competitive interest rate starting at just 7.99%* p.a. Check your eligibility today to see if you qualify for those rates. You may already be eligible, find out by entering your mobile number and OTP.
Will cuts in lending rate push prospective home buyers to take the plunge?
Many experts say that home loan rates impact buying decisions, but they are not the only factor. Buying a house is a big life decision, and small changes in interest rates might not push people to buy if they were not already planning to. However, these changes do affect how much loan you can get. For example, with Bajaj Finance offering rates starting from 7.99%* p.a., buyers can now qualify for larger loan amounts. The lower rates create positive feelings in the market and might give some buyers the final push they need.
Do low home loan rates mean it is a good time to buy a house?
Low home loan rates impact buying decisions in a positive way. When rates are low, your monthly payments go down, making homes more affordable. With EMIs as low as Rs. 722/lakh* with Bajaj Finserv, you can stretch your budget further. But you should not buy a house just because rates are low. You need to think about your job security, savings, and long-term plans too. Low rates are just one factor in deciding if it is the right time to buy. Check your loan offers from Bajaj Finserv to see how low rates could benefit you. You may already be eligible, find out by entering your mobile number and OTP.
Will property prices continue to rise?
Property prices have gone up a lot in the past few years. This happened because building materials cost more and there is a shortage of workers. How home loan rates impact buying decisions becomes even more important when prices are rising. If property prices keep going up fast, even low interest rates might not make homes affordable. However, many experts think price increases will slow down because people are finding it hard to afford homes. The job market has also slowed, making it harder for people to switch jobs for better pay. This means prices might stabilise soon.
Is it smart to use cash to prepay outstanding long-term loans?
If you have extra cash, you might wonder if you should use it to pay off your home loan early. Home loan rates impact this decision too. If your loan has a high interest rate, paying it off early could save you money. However, if you have a low-rate loan from Bajaj Finserv with rates starting at 7.99%* p.a., you might be better off investing that money elsewhere. You should also think about whether your property will go up in value. If it will, you might want to keep your cash for other opportunities.
Advice for individual investors in real estate right now
If you are thinking about investing in real estate, you need to plan carefully. Home loan rates impact buying decisions for investors too. Choose a reliable developer and a flexible lender like Bajaj Finserv that offers options based on your financial situation. Bajaj Finserv offers home loans up to Rs. 15 crore* with tenures up to 32 years, giving you the flexibility you need. Check your eligibility for a Bajaj Finserv Home Loan to see what options are available to you. You may already be eligible, find out by entering your mobile number and OTP.
Also, think about getting insurance equal to your home loan amount. This protects your family from having to pay off your loan if something happens to you. Remember that insurance is not always required with a home loan, so educate yourself on your options.
Strategies to manage interest rate changes
Home loan rates impact buying decisions and your long-term financial health, so you need good strategies:
- Choose between fixed and floating rates: Fixed rates stay the same throughout your loan, while floating rates can change. Fixed rates give you predictable payments, but floating rates might be lower to start with. Bajaj Finance offers both options to suit your needs.
- Consider refinancing: If rates drop after you get your loan, you might save money by refinancing. Bajaj Finance offers balance transfer options with interest rates starting from 8.10%* p.a.
- Make part-prepayments: Using extra money to pay down your loan can reduce the total interest you pay. Bajaj Finance allows part-prepayments without charges for individual borrowers with floating rate loans.
- Extend or reduce your tenure: If rates go up, extending your tenure can keep your EMI manageable. If rates go down, reducing your tenure can help you pay off your loan faster without changing your EMI.
- Stay informed: Keep track of RBI policy changes and how they affect home loan rates. This helps you make timely decisions about your loan.
Many things affect what interest rate you will get on your home loan.
1. RBI's monetary policy and repo rate
The RBI sets the repo rate, which influences all lending rates in India. When the RBI raises this rate, home loan rates typically go up too. When it lowers the rate, home loans can become cheaper. The RBI makes these decisions based on inflation, economic growth, and other factors. Bajaj Finserv offers externally benchmarked interest rates that move with the repo rate, helping you benefit during favourable market conditions.
2. Type of lender
Different lenders offer different rates. Banks, housing finance companies (HFCs), and non-banking financial companies (NBFCs) all have their own ways of setting rates. Bajaj Finserv, as a trusted lender with 3 lakh+ customers, offers competitive rates starting from 7.99%* p.a. for salaried individuals and 8.30%* p.a for self-employed professionals.
3. Credit score of the borrower
Your credit score shows how reliable you are at repaying loans. A high score (above 725) can get you lower interest rates. Bajaj Finance looks for a CIBIL score of 725 or higher for the best home loan rates. If your score is lower, you might pay more interest or even be denied a loan.
4. Loan amount and tenure
How much you borrow and for how long affects your interest rate. Bajaj Finance offers home loans up to Rs. 15 crore* with tenures up to 32 years. Longer tenures usually mean lower monthly payments but more interest paid overall. Shorter tenures often come with lower interest rates but higher monthly payments.
5. Loan-to-value (LTV) ratio
The LTV ratio is how much of the property's value you borrow. If you make a larger down payment, your LTV ratio is lower, which might get you a better interest rate. This is because the lender takes less risk when you have more of your own money invested in the property.
6. Type of interest rate chosen
The type of interest rate you choose affects your loan costs. Bajaj Finserv offers both fixed and floating rates. Fixed rates stay the same, giving you predictable payments. Floating rates can go up or down with the market. Floating rates often start lower than fixed rates but can change over time. Check your loan offers to see which option is best for you. You may already be eligible for competitive rates, find out by entering your mobile number and OTP.
7. Property location and age
Where your property is located and how old it is affect your interest rate. Newer properties in good areas usually get better rates because they are less risky for lenders. Bajaj Finserv has 5,000+ approved projects that can help you get a quick loan approval within 48 hours*.
8. Employment and income profile
Your job and income affect your interest rate too. Salaried people often get better rates than self-employed people because their income is more stable. Bajaj Finserv offers rates from 7.99%* p.a. for salaried individuals and from 8.30%* p.a for self-employed professionals and doctors.
How to apply for Bajaj Finserv Home Loan
Getting a home loan from Bajaj Finance is easy. Here is what you need to do:
- Click on the 'APPLY' button.
- Enter your full name, mobile number, and employment type.
- Select the type of loan you want (fresh home loan, balance transfer, or top-up loan).
- Verify your phone number with an OTP.
- Enter details like your monthly income, required loan amount, and whether you have identified a property.
- Provide your date of birth, PAN number, and other required information.
- Submit your application.
Eligibility criteria to get home loan from Bajaj Finserv
To get a home loan from Bajaj Finserv, you need to meet these criteria:
- Nationality: You must be an Indian citizen living in India.
- Age: If you are salaried, you should be 23-67 years old. If you are self-employed, you should be 23-70 years old. The upper age limit is your age when the loan ends.
- CIBIL Score: A score of 725 or higher is ideal for getting a home loan.
- Occupation: You can be a salaried employee, a professional, or self-employed.
- Documents required for home loan: You need KYC documents (ID and address proof), proof of income (salary slips or P&L statement), proof of business (for self-employed applicants), and bank statements for the last 6 months.
Conclusion
Home loan rates impact buying decisions in many important ways. They affect how much you can borrow, what your monthly payments will be, and how much your loan will cost over time. With Bajaj Finserv offering interest rates starting from 7.99%* p.a., EMIs as low as Rs. 722/lakh*, and loans up to Rs. 15 crore*, now might be a good time to consider buying a home.
Bajaj Finserv also offers several benefits that make their home loans attractive:
- Approval in 48 hours*.
- Flexible tenure up to 32 years.
- No foreclosure fee for individual borrowers with floating rate loans.
- Top-up loans up to Rs. 1 crore.
- Balance transfer facility.
- 5,000+ approved projects for quick loan processing.
