Kathmandu. Banks and financial institutions have been seen in a strategy to increase home loans due to lack of credit expansion in other sectors. They are working on a strategy to increase the flow of loans by providing home loans at cheap and affordable interest rates and to make the construction sector dynamic.
In recent times, the construction of houses has also started increasing. It also seems to be increasing home loans from banks and financial institutions. Due to low interest rates, it has become easier for borrowers to build houses by taking loans.
Real estate loans (including personal residential home loans) have increased by 4.9 percent in the current fiscal year. Banks have extended rs 279.88 billion in real estate loans between June and March 2018. Banks and financial institutions had extended home loans worth Rs 268.12 billion in June last year.
The bank’s interest rate has been declining lately. In addition, banks are coming up with various offers for home loans. As a result, bankers say, customers are taking money to build a house.
Commercial banks are offering home loans at single digit interest rates this May. Prime Commercial Bank is providing loans at the lowest interest rate for home loans. The bank’s minimum interest rate for May is 5.99 per cent, which is lower than other banks. The bank’s maximum interest rate is 12 percent. Prabhu Bank has the highest interest rate for taking loans. The bank offers home loans at a fixed interest rate of 11.99 per cent.
Himalayan and Machhapuchhre Banks have fixed a fixed interest rate of 9.5 percent on home loans. Siddhartha Bank has fixed a fixed interest rate of 8.75 percent for home loans while Kumari Bank has fixed 8.59 percent. While taking home loan from NIC Asia Bank, you have to pay a minimum interest of 8.25 percent to a maximum of 10.25 percent. Global IME Bank is charging a minimum interest rate of 6.16 percent and a maximum of 9.66 percent for home loans.
Similarly, Agriculture Development Bank has been providing home loans at minimum 6.35 percent and maximum 8.35 percent, Everest Bank at minimum 6.45 percent to maximum 8.45 percent interest rate.
Eight commercial banks, including Standard Chartered, have set a minimum interest rate of 7 to 8 percent for home loans. Standard has fixed a minimum interest rate of 7.02 percent and a maximum interest rate of 9.02 percent for home loans.
Rastriya Banijya Bank has fixed minimum 7.04 percent and maximum 7.79 percent interest rate for home loans, Nabil bank is offering minimum 7.22 percent and maximum 8.97 percent, Nepal SBI Bank minimum 7.23 percent and maximum 9.23 percent, Laxmi Sunrise Bank minimum 7.78 percent and maximum 9.78 percent, Sanima Bank minimum 7.87 percent and maximum 9.78 percent interest rate.
With the increase in liquidity in the banking system, banks have started increasing their investment towards home loans. Banks have also started making public various offers for home loans to customers with a plan to charge interest in single digits.
While experts are pushing for expansion of credit in the stock market and the construction sector to overcome the slowdown in the economy, banks are also attracted to it.
The demand for home loans has also increased in recent months, say bankers. In this way, if the number of houses is increased by increasing the credit, then there will be a situation to increase investment in the construction sector and create jobs and accelerate economic activities.
Banks have also started giving priority to home loans as the demand for cement, bricks, iron, wood, electrical equipment and furniture will increase during the construction of houses.
