Realty stocks gathered momentum Monday on media reports that state-run banks will unveil special home loan plans as part of the federal government’s stimulus package.
Under the package to be announced by the Indian Bank Association, housing loans up to Rs 500,000 will be priced at 8.5%, and borrowers in the 5-20 lakh category will have to pay 9.25% interest, it said. The interest rates across all price segments currently exceed 10%.
The special package will also offer a free loan insurance cover, waiver of pre-payment penalty and lower margins, the paper reported.
Banks may accept a margin of 10% for a Rs 500,000 loan and 15% for a Rs 20 lakh loan while the borrower will have to make an upfront payment of 10% and 15% respectively of the purchase value.
The package is aimed at boosting growth, and will be available only for new home purchases and not for refinancing existing borrowers, the paper said citing bankers involved in working out the details.
The special package will only be offered by state-run banks as per government directives, the paper said.
At 10:45 am, Unitech climbed 11.66%, Peninsula Land rose 10%, Sobha Developers surged 9.66%, HDIL was up 9.04% and DLF gained 4.7% taking the BSE Realty Index up 6%.