Many home loan customers are hopeful of a substantial reduction in EMIs in 2014. The recent decision of State Bank of India, ICICI Bank and HDFC to lower their home loan rates on the back of RBI's decision to hold key policy rates has further fuelled expectations of a meaningful easing of interest rates in the coming year. Karthik Srinivasan, senior vice-president and co-head, financial sector ratings, Icra, believes interest rates will head downwards in the second half of 2014.
However, many experts disagree on its timing. "Taking into account global and local factors together, it is hard to say exactly when the rates in the system will come down. There is little room for policy rate cut in the quarter ending March 2014," says K Harihar, treasury head, FirstRand Bank.
"Even if inflation goes down from current levels, the jury is still out on whether it will result in a rate cut, though lending rates may see some marginal softening around this time if the liquidity situation eases in the real market."