On Monday, realty stocks experienced a significant uptick following media reports indicating that state-owned banks are set to introduce special home loan plans as part of a forthcoming stimulus initiative from the federal government.
According to the information disclosed by the Indian Bank Association, the new housing loan offering will feature an interest rate of 8.5% for loans up to Rs 500,000, while borrowers seeking loans in the range of Rs 5-20 lakh will incur a 9.25% interest rate. This is considerably lower than the current interest rates, which exceed 10% across various pricing categories.
The proposed package is reported to extend additional benefits including complimentary loan insurance, waiving pre-payment penalties, and reduced margin requirements.
In terms of compliance with lender requirements, banks are expected to set a margin of 10% for a Rs 500,000 loan and 15% for a Rs 20 lakh loan, necessitating an upfront payment of 10% and 15% of the total purchase value by the borrower, respectively.
This tailored package, crafted to stimulate economic growth, will exclusively facilitate new home purchases and will not extend to refinancing existing loans, as outlined by business insiders collaborating on the initiative.
Notably, this special lending offer will be restricted to state-run banks in accordance with government regulations.
By 10:45 am, shares of Unitech had surged by 11.66%, Peninsula Land saw an increase of 10%, Sobha Developers rose by 9.66%, HDIL advanced by 9.04%, and DLF was up by 4.7%, contributing to a robust 6% gain in the BSE Realty Index.