Buy your dream house this year: CNBC-TV18 poll

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Buy your dream house this year: CNBC-TV18 poll

Will your home loan EMI go up in the New Year? No, it won't is the unanimous view. But will it fall? Most bankers think a cut in interest rates, if at all, will come only by the end of the year. CNBC-TV18’s Latha Venakatesh and Krupali Pandit Yadav give the results of a poll of bankers about the interest rate scenario in the New Year.

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Will your home loan EMI go up in the New Year? No, it won't is the unanimous view. But will it fall? Most bankers think a cut in interest rates, if at all, will come only by the end of the year. CNBC-TV18's Latha Venakatesh and Krupali Pandit Yadav give the results of a poll of bankers about the interest rate scenario in the New Year.

2008 may actually be a good time to buy your dream house, as interest rates are unlikely to inch up in the New Year.  In a poll conducted by CNBC-TV18, bankers were unanimous, that neither the RBI nor banks will raise rates.

But will the regulator cut its key policy rates, the repo, reverse repo and cash reserve ratio?

 Again all the bankers said they do not expect a rate cut in January. 6% said they expect a rate cut signal in the first half while the remaining 94% held that a rate cut, if at all, will come only late in 2008.

They reason that abundant capital flows and the likelihood of a fuel and food led inflation will prevent the RBI from hastening a rate cut.

"We do not expect that RBI will cut any of the policy rates. They will have to keep watch on inflation and money supply, which is at this time okay, but loan rates can come down," said MV Nair , CMD, Union Bank of India .

However, bankers say even without RBI cutting policy rates, banks may drop their lending rates. That is because loan demand has fallen to 22% in 2007, from over 30% in the past three years.

Bankers expect lending rates to fall around 1% and deposit rates by quarter to half a percent.

Yields on government bonds are expected inch down. 10-year bond yields, which have stabilised between 7.85 and 7.9%, may fall to 7.6-7.75%. If a decision on cutting SLR is taken in the second half, then government bond yields may fall further to 7.5%. But most bankers are not expecting that decision in a hurry.