Home buyers in Noida Extension were dealt a double whammy on Tuesday. While their agony is going to get prolonged as hearing of petitions filed by villagers in the Allahabad High Court has been deferred, they may soon have to shell out additional interest rates on home loans.
“With the increase in repo and reverse repo rates by 50 basis points each by the Reserve Bank of India (RBI), there is bound to be an increase in interest rates on all kinds of loans. Home loans are always affected as most of them are given out on floating rates of interest,” said chief economist of CRISIL, D K Joshi. “It depends, however, on individual banks as to when and by how much they increase these interest rates,” he added.
Home buyers, most of them being from the service class, are now afraid that their monthly salaries would shrink before it reaches their pockets because EMIs on loans are deducted from source. This would put them in a tight situation.
“According to the construction-linked plan, under which I pay amounts in installments to the builder, I am paying an interest of Rs 11,500 every month as pre-EMI,” said Kumar Rohit, a security consultant who has taken a loan of Rs 18.5 lakhs for his 3 BHK flat in Supertech Ecovillage–I. “As salaried people, our resources are limited and it is difficult for us to cut down expenses for paying the bank,” he added. His friends have decided to write to the RBI to consider stopping EMIs till all issues are resolved.
Devender Kumar, a systems consultant, pays a pre-EMI of Rs 5,000 every month for his home-loan of Rs 20 lakh. “Just look at my plight. My house rent is set to increase in a few months from now. If I have to pay higher EMIs on top of that, there is no guarantee that I would get my house,” said Kumar, who has booked a 3 BHK flat in Panchsheel Greens–I.
Those with fixed rates of interest are also apprehensive and say they may soon have to pay additional interest amounts. “I had taken a home loan under a fixed rate of interest for three years,” said Rajiv Dixit, a Delhibased engineer who has booked a 2 BHK flat with Panchsheel Greens–I. “The bank may increase the interest rates once the three-year period expires at the beginning of the next financial year,” he added.
Some buyers who have exhausted all their savings after booking their house are agonized over the long wait and uncertainty prevailing over it. “I invested all my retirement benefits into this house. The wait has been long and painful. We do not know where we will go from here because no solution is in sight,” said A K Malhotra, a retired bank official, who has booked a 3 BHK flat in Supertech Ecovillage–II.
“At the moment, me and my family are praying that we somehow get the house on time,” added Malhotra.
“I am pushing 50. Learning from the experiences of my life, I fear that I may neither get my house nor my investments back,” said Manoj Kumar Gupta, an employee in a private company. Gupta, who has booked a 1 BHK flat in Supertech Ecovillage–I, adds, “I stay with my family in Noida in a relative’s house and he has let it out to us at a rent cheaper than market rates. Things are getting embarrassing for me as I will have to continue taking his favour,” added Gupta.