Planning a Home Loan? EMIs may come down soon!
In its second meeting, the Reserve Bank of India (RBI) today lowered its policy repo rate by 25 basis points to 7.5 percent. Also, the reverse repo rate moved down to 6.5 percent, while the central bank kept the cash-reserve ratio unchanged at 4 percent.
Welcoming the step, Manoj Gaur, MD, Gaursons India ltd & President CREDAI Western UP said, “It is a surprise gift by RBI to the home loan seekers in India. Now we are waiting for the banks to cut down a bit on home loan interest rates so that buyers can get lower EMIs. This step reflects that the government is gradually working towards providing housing for all.”
This rate cut definitely signifies that the government has been able to create conducive environment for low interest rate regime. Explaining the same, Manish Agarwal, Managing Director, Satya Group & Secretary, CREDAI NCR says, “A cut of 25 basis point may not look to be significant from the point of view of current health of economy and consumer sentiments, but it will bring great respite for the working class who were reeling under tremendous financial pressure due to high EMIs.”
Reiterating the same, Mohit Goel, CEO, Omaxe Ltd said, “On the back of Budget, the cut in repo rate by 25bps to 7.5% is a quick move by the Reserve Bank of India to make every attempt to lower the cost of financing and spur demand in the economy. With two cuts in a span of 1.5 months, the apex bank has given the right signals and it’s time banks reciprocated.”
People have been waiting for the house prices to come or for the EMIs to rationalise, and this cut in repo rate will definitely mean a good drop in EMIs. “The cut in repo rate will definitely help the real estate sector gain some steam. We expect that this Holi will be a good one as people will love to take advantage of the RBI’s gift,” says Sanjeev Varshney, MD, Prop Leverage.
All said and done, now the onus now lies with banks to pass on benefit to the borrower. With government fixing RBI’s responsibility to control inflation, the economy is heading towards a new era which will reap tremendous benefits for all stake holders.
“Reduction in the interest rate will leapfrog the economy with benefits to all sectors. The real estate sector would also benefit if the rate is cut for retail loans,” adds Agarwal.
Below are few effects on home loans listed by Rishi Mehra, Co-Founder of Deal4loans.com
- The rates for new customers should fall by 0.25% immediately.
- So, expect rates to come down to 9.75% and rates will be finally under single digit.
- These rate cuts can be expected for existing customers too.
- Anyone having a Home loan of 20 lakh @ 10 % can expect an EMI reduction from 19,300 to 18,970 and saving of Rs 330 per month as his new rates may fall down to 9.75%.