Indian home loan rates now match the government’s borrowing costs closely. This creates the world’s tightest gap between mortgages and sovereign bonds. It gives Indian residents and non-residents a strong edge in global property markets.
Market expert Anubhav Kapoor says major banks like HDFC and State Bank of India offer loans at 7.4 percent. That’s only 16 basis points over the 30-year government bond yield of 7.24 percent.
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In places like the US, the gap between home loans and long-term bonds is wider. It’s 1.6 percentage points there, about 35 percent above the government rate. Canada, the UK, and Australia have gaps from 33 to 61 percent.
India’s slim difference lets middle-class people borrow at costs like the government’s. This odd setup makes home loans very cheap compared to other nations.
Kapoor highlighted a key benefit for Indians abroad. They earn in dollars, Canadian dollars, pounds, or Australian dollars but buy Indian homes in rupees. The rupee weakens by 3 to 4 percent each year against those currencies. That shift helps boost gains for foreign buyers.
This mix of low borrowing for locals and currency gains for those overseas keeps Indian property strong over time. Many world markets cool or drop, but India’s homes draw steady interest from home and abroad.
When a nation lets people borrow at government rates and gives overseas Indians a currency boost, you see why Indian real estate holds up long-term, Kapoor said. SPOTLIGHT