India property mortgages get cheaper

A mortgage lending rate war is helping to lower borrowing levels and fuel India property prices in some parts of the country.

Development Credit Bank (DCB) and GIC Housing are among those lenders currently offering mortgages below the psychological 8% borrowing rate.

Praveen Kutty, executive vice-president and head, retail banking, DCB, said: “While affordable housing is the buzzword these days, the market would get a further boost if attractive financing options are available.”

Meanwhile, the Central Bank of India and Punjab National Bank have abolished mortgage arrangement fees in an attempt to attract more homebuyers.

The greatest mortgage applications have come from people seeking to buy affordable properties in India.

Cheap mortgage borrowing costs has helped India property values increase.

In the last three months, prices of affordable apartments in India have appreciated by around 10% across the country.

Anshuman Magazine of property consuntancy firm CB Richard Ellis South Asia said: “With improvement in the sentiment in the economy, transactions in the affordable range of residential real estate have gone up. This has made developers to increase prices by 5%-10% in the last three months.”