Should NRIs go for a home loan after recent interest rate cuts?

Higher exchange rate and low interest rate makes case for home buying especially for US based NRIs (Non Resident Indians)

After the government demonetisation drive Indian banks are flooded with low cost deposits which has made them to reduce interest rate in a big way. The biggest lender State Bank of India has gone for 0.9% rate cut in its one year MCLR which is an unprecedented rate cut. This has resulted in a situation where home loan rates have come down to the lowest level seen in last 6 years.

Besides the significant fall in interest rate there is a fall in Rupee against the USD and it is trading around INR 68.02 per USD as of January 2, 2017, which is not away from its lowest value of INR 68.78 per USD seen on 26 February 2016. This gives dual advantage of low interest rate and higher exchange rate to NRIs especially from those countries whose currencies have appreciated against rupee to go for a home loan for buying a home loan. 

Another additional reason for going for home buying spree is the government's attack on black money has affected correction in home prices in many places. Absence of cash component reduces the speculative demand in the market and its only the end user which look for buying in such market. Hence this reduction in demand forces home prices to come down.

All these favourable conditions make a strong case for you to go for buying your dream and more so if its intended for an end use in India.

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