Ashwini Kumar Hooda, Deputy MD of Indiabulls Housing Finance in an exclusive interview with ET Now said that despite rate hikes, home loans still most affordable in India.

Hooda said that affordability today is at its best in India. "Today, an average person is borrowing 2.7 times his annual income for a home loan, which used to be something like 3.8 times in 2010. So clearly, our affordability has improved so much that even 200-250 bps of increase this time, will not disturb the demand."

Indiabulls Housing has increased its home lending PLR by 10 bps in line with the MCLR increased by the banks.

He added, "MCLRs have gone up by 20 to 30 bps over last four-five months whereas bond market yields have spiked up anywhere between 60 and 100 bps. This increases our costs but as we are able to pass all this cost increase to our customers where 99% of home loans are in floating rates structure. So, the spreads remain stable but the higher cost gets passed on to the customer. While these costs might pinch them a bit, they still enjoy one of the lowest rates on the home loan, factoring in the tax benefits and the PMAY Scheme. Their effective cost is very low and hence they should be able to absorb this."

Source