"Nowadays, in the Real Estate sector there is a revolution for mortgage loan. All the news paper and magazine are with full coverage of lower interest rates for home loans, lower EMI on home loans, lower mortgage interest rates etc. But what is the actual situation have to justify.
According to the SBI calculation on fixed 12% interest rate the EMI will be 867.82 now upto Rs. 5 lakh on per lakh for every month. Old EMI was 1,101.09 upto Rs. 5 lakh for per month on every Rs. 1 lakh. It means, your saving is about 233.37 up to Rs. 5 lakh for every month on per lakh.
For the Rs. 5 to 20 lakh new EMI will be 915.87 per month for every Rs. One lakh rather than 1,101.09 old EMI. It means, your saving is Rs. 185.22 for per one lakh amount if you get the home loan for Rs. 20 lakh for the 20 years tenures.
Overall your saving will be Rs. 185 to 233 for per lakh on the home loans for 20 years. It was the calculation on the basis of 12% fixed interest rate by State bank of India.
What is the reality of these loans? For example you borrow a loan amount of Rs. 20 lakh for the 20 years then what will be EMI?
According to the new EMI calculation you have to pay per month about Rs. 17356.4 if all the circumstances don’t change. However, your older calculated EMI was for Rs. 20 lakh per month – Rs. 22021.8.
You can just imagine that if you buy a home on the amount of Rs. 20 lakh then you have to pay total in 20 years Rs. 41,65,5,36. It means just double amount for that Rs. 20 lakh in 20 years.
So, in the Indian context you can imagine who can buy the flats to take loan by banks! It is the revolution of Indian Real Estate sectors and income and investment of Banks.
Another story says that you can borrow whole amount by banks on 0% down payment. Is it crisis or investment? However, the home loans or mortgage loans trends has been not increased as year of 2006-2007.
Total deduction in the percentage of interest rates is 1 to 1.5. The actual interest rates will follow with the monthly EMI on the basis of loan amounts and loan terms.
All the activities is the result of government pressure on banks due to economic crisis for the liquidate the capital in the consumers."
Source Via :New EMI Calculation for Home Loans on lower interest rates in India