The Indian mortgage industry is a saga of great opportunities, tremendous growth and wonderful returns over a period of time. The sector has witnessed a significant double digit growth of almost 30% over last 3 years though the same is expected to be lower at 20% during 2007-08 due to rising interest rates and a slight correction expected in the property market especially in B and C segment markets and centres. According to a study conducted by CRISIL, India, the slower growth reflects the impact of rising property prices and interest rates. The interest rates have touched almost 12% floating and more than 13% fixed, highest since the year 2003 and 2004.

The study also shows that the increase in property rates coupled with higher interest costs have resulted in the negative impact on the affordability index which measures the ratio of rates of property to the net annual income of borrowers or purchasers of the property, the index is still at 5.2, which favors well comparable to other developing nations. The changing profile of the buyers in the Indian property scenario is also changing for a positive. The average age of Indian property buyers and borrowers is reducing. This means a longer repayment period and consequently an ability to borrow a higher amount of home loan. With increasing disposable income, and a trend of double income families gaining ground, the scene was never so good for the sector.

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