Low rates: Borrowers prefer home loans of shorter terms - A test article

Mumbai: The fall in interest rates has increased the eligibility of borrowers as it reduces their monthly outgo. Borrowers are, however, choosing to use the lower cost to repay loans faster and opting for shorter durations.
According to a survey by Magicbricks, the period of up to 10 years is the most preferred duration of homebuyers with 26% of the respondents giving the nod for it.It was followed by 10-15 years (25%) and 15-20 years (23%) as the next most preferred tenures for home loans. About 16% respondents said that they would like to take a loan for more than 25 years, while only 10% said that they would wish to take a home loan for 20-25 years. Property site Magicbricks, which also enables borrowers to avail home loans, is a part of the Times Group.
“With average home loan interest rates hovering between 6.65% and 6.9%, borrowers are now wanting to repay their mortgages as fast as possible. Thus, around 50% of the borrowers now prefer to have a loan tenure of up to 10 years or 10-15 years and close their financial liability as quickly as possible,” said Magicbricks CEO Sudhir Pai. He added that there is demand revival for mid- and high-range homes due to reasons like need for an extra room due to work from home, reduction in circle rates, stamp duty and low interest rates.
Consumer behaviour on Magicbricks Home Loans suggests that most of the demand for home loans is being generated from the key residential markets of Bengaluru, Hyderabad, Delhi, Mumbai and Pune.