From June 27, 2025, the growth of the housing loan of banks (including loans for priority sector) left to 9.6 percent yoj
The growth of the housing loan has hit the slow job, whereby potential borrowers prefer waiting and look at the current rate cutting cycle to get the benefit of borrowing cheaper along the line.
These borrowers may have measured that they are better off postponing borrowing with a few months in their search for softer interest rates and Lower EMI -Outgo
The reason is that the Central Bank is expected to reduce its signal (REPO) rate in two tranches of 25 basic points by December 2025 and will be sent in loan interest banks and home financing companies (HFCs), which translates into lower loans for new borrowers.
That potential borrowers from housing loans keep a close eye on and accept loan calls accordingly by RBI data.
As of June 27, 2025, the growth of the housing loan of banks (including loans for priority sector) left an annual basis (yoj) of 36.3 percent YOY growth on 28 June 2024. In FY26 so far (until June 27, 2025), the growth of the loan fell to 1.9 percent on June 28, 202.4
Tribhuwan Adhikari, Managing Director & CEO, Lic Housing Finance Ltd,said:“We are now in the middle of an interest rate reduction cycle … And at first when RBI reduced the rates with 100 basic points, we were very stimulated and happy and we hope for a large increase in question.
“Unfortunately, at least at LIGFL, we have not seen that increase in question … I believe that many of the borrowers are waiting for this cycle to be completed and have a full advantage of the tariff reductions,” he added.
He noted that borrowers can take into account the chance of further cuts. So they can wait for the full speed cycle to continue before they take a phone call.
“As far as new (home) loans are concerned, there is a delay. This is actually very surprising. I was surprised because when the repo rates fell with 100 basic points, I was quite gung-ho, hopefully looking for a good question in the market for home credit,” he said.
“We expected a good boost, but unfortunately that did not happen and it intrigues me. The only logical explanation I can give is that people are smart. They probably know that further cutbacks are coming and waiting for the cycle, waiting for the cycle to be completed before he picks up a phone call (when borrowing),” Adhikari said.
The Lichfl chef expects acceleration in home loans from the third quarter, with the climbing of the loan to double digits of a few figures (3 percent growth in payouts) in the first quarter.
Published on August 2, 2025
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