my question to all the intelligent people is i have taken a home loan in 2004 at 8% fixed, and that time bank repo rate was lower than now and inflation was under control and y suddenly interest rates have gone up? my question is if interest rates were less during 2004 and inflation was under control y then RBI has increased Repo rates? can any one who know better answer my question? You can also mail me at sheela709@rediffmail.com
RE:Inflation?
by Venkateswaran Natarajan on Apr 07, 2007 04:24 PM Permalink
The fact of the matter is "The government does not know how to rein in inflation" rather than burdening the common man with rate hikes. The most ideal solution would be to try and increase the supply of housing projects. That way the demand supply gap will be lessened and the rates will go lower. The government is instead punishing the common man who has bought a house to live and not as an investment. For the businessman he is going to pass on the rate hikes to the consumers. So the persons getting affected are common middle class people. Further even Fixed loans are not entirely fixed, there is a clause whereby the banks can increase the EMI or Tenure of the loan. This clause is inserted typically to protect the bank's interests.
RE:Inflation?
by G S on Apr 07, 2007 04:19 PM Permalink
you are lucky one who bought your house with fixed rate of interest but 90% of total housing loans are floating it means that additional burden of 25% in EMI due to this rate hike
RE:Inflation?
by Shanker Shetty on Apr 07, 2007 04:02 PM Permalink
hi, sheela, this is primarily because real estate prices have gone skyrocketed and real estate prices have become alsomost double since the last one and half year. govt just want to control the real estate prices..which is not the correct way.. any queriess write to me at shan_shet@rediffmail.com
you can also call up PC and ask him and fire the hell out of him ...check the telephone directory and there you wll have the conact number.
RE:Inflation?
by sheela sharma on Apr 07, 2007 04:35 PM Permalink
Mr.Shetty, i know that, to control real estate prices you have to control bring real estate regulation act or similar to that of IRDA,TRAI, etc., by hiking the rates it will affect common borrowers and middle class,higher middle class if they have money they wont take home loan!
