When the chairman and managing director of Corporation Bank [Get Quote], B Sambamurthy, recently said that the bank was bringing down its home loan rates from 10.5 per cent to 10.25 per cent (for loans below Rs 20 lakh) because rates were softening, it caused a bit of a flutter. Most home buyers would like to know if the rates are really going to come down in the coming months.

Market bigwig, HDFC [Get Quote], has already cut rates from 11. 25 per cent to 11 per cent as special monsoon offer.

Just last week, HDFC chairman Deepak Parekh said that if the Reserve Bank of India [Get Quote] (RBI) did not indicate any hike, the bank could bring down home loan rates after the credit policy on August 31, 2007, because the cost of borrowing has been going down.

Says Suresh Soni, chief investment officer, Deutsche AMC, "There has been a perception change that the overall interest rates have almost peaked. A general feeling is there that stability is around the corner."

The average call rates, in March 2007, were at 11 per cent and now they are as low as 0.5 per cent. In other words, liquidity conditions have improved vastly in the last four months. "I expect that home and other mortgages could come down," adds Soni.

Says M Sundararajan, the chairman of Indian Bank [Get Quote], "I expect both deposit and advances rates to go southwards." He expects the one year deposit rate to come down soon by 50 basis points and then rates on mortgages to follow.

However, Harsh Roongta, CEO, www.apnaloan.com, differs: "I would consider this softening a temporary phase." There are a couple of factors driving this feel-good feeling, he says. One, since this is off-season for home-buyers, one could perceive these reductions as more of tactical moves by banks.

Also, better liquidity conditions have encouraged them to go for small corrections. Agrees Madan Sabnavis, chief economist, National Commodities and Derivatives Exchange, "These small cuts are basically incentives for home buyers who have been waiting for some relief."

It is obvious there are diverse views on whether the rate correction is here to stay. As Roongta puts it, "There is nothing indicative in this market for the lay person." His reasoning is that with oil prices approaching $80, it is unlikely that one will see any sharp movement.

Even the credit policy is expected to maintain the status quo. Experts feel that post October, when the home-buying season starts, one could even some rise in the rates.

In other words, it is wait-and-watch for those waiting for rate corrections. And for the ones who are buying their first homes, the old adage, 'never try to time the market,' still works fine.