I read the article by R.P. Deshpande on 30-year home loans (The Hindu-Property Plus, November 19) and it was informative. I am looking to buy a house in Hyderabad. But the interest rates are quite high. I would like to ask the author if the interest rates will come down in the near future? Or will they come down at all?

Harsh Pensi

IIT-Bombay alumnus

Mr. Deshpande replies: The interest rates may continue to be at higher levels, looking at the overall economy. Since home loan runs for 15-20 years, if one has taken a loan at floating rates, the average interest rate may be much less than the present 11-12 per cent.

It is advisable to buy a home at any time, if it is need based. If any one is thinking of buying a house as a pure investment, he need to wait for a while and then decide.

The value of money

The article on 30-year home loan by R.P. Deshpande in PropertyPlus was fine. It will in the real sense educate people, particularly youngsters.

But the author has not duly taken into account the value of money. Some calculations on NPV of future interest minus tax benefits (at marginal tax rates) would have been still better. He has also not taken into account MPS (Marginal Propensity to Save in future).

Elango C.,

MD, Can Fin Homes Ltd.

Mr. Deshpande replies: Thanks for your observations, sir. I will consider your valid views while making articles on similar issues in future.