Housing loan borrowers are making the most of the current record-low interest rate regime as indicated by a 42% on-year surge in demand for Balance Transfers (BT) and 26% rise for home loans in the first half of 2021, showed a Magicbricks Home Loans Consumer Study.The demand for Loan Against Property (LAP) during this period has also witnessed a 20% rise. The soaring demand is largely attributed to the Reserve Bank of India’s decision to keep the repo rate unchanged at a constant 4%.This has allowed many banks to offer home loans at interest rates lower than 7%, which has also been a key driver in augmenting the demand for home buying.

Magicbricks Home Loans Consumer Study also reveals that the most frequently searched home loan amount across tier-1 cities during this period was Rs 36 lakh, while that for BT and LAP were Rs 26 lakh and Rs 32 lakh, respectively. For tier-2 cities, it was Rs 26 lakh for home loans, Rs 23 lakh for LAP and Rs 18 lakh for BT.“The rising demand for home loans is in line with the increasing demand for residential real estate across key markets of India. Several initiatives by the government, such as keeping the repo rate constant and reduced stamp duty rates, are steps in the right direction. These measures have been instrumental in boosting the overall consumer sentiment, making almost 50% of the borrowers opt for tenures less than 15 years,” said Sudhir Pai, CEO, Magicbricks.With factors like low interest rates, stable prices, and attractive payment plans, he hopes the pent-up demand would soon translate into sales.”With Work from Home (WFH) becoming a norm, home buyers are now looking to buy or upgrade to large configuration houses, and thus the demand is mostly in the mid and above segments, said the report.Hyderabad, Pune, Ahmedabad, Mumbai, and Delhi are the top five tier-I cities witnessing maximum demand for home loans. A similar trend has been recorded in tier-II cities like Lucknow, Patna, Indore, Jaipur, and Agra.In terms of the demand for Balance Transfers, New Delhi, Bangalore, Mumbai, Pune, and Hyderabad were the top five tier I cities, and Ghaziabad, Mohali, Noida, Indore, and Visakhapatnam the top five tier II cities.For LAP, Bangalore, Hyderabad, Chennai, New Delhi, and Pune saw the most demand across tier I cities and Gurgaon, Jamshedpur, Patna, Faridabad, and Lucknow for tier II cities.According to the report, Bank of Baroda,, SBI, HDFC and ICICI Bank are the most searched lenders on Magicbricks’ Home Loans platform.Magicbricks is a part of Bennett, Coleman & Co, which published The Economic Times.