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Impact of RBI Expected Repo Rate Cut on Homebuyers

RBI repo rate at 6.5% impacts home loans; interest rates range from 8.25%-9.50%. Lower rates boost PMAY affordability for homebuyers. Explore more with India Property Dekho.u00a0

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Impact of RBI Expected Repo Rate Cut on Homebuyers

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  1. Impact of RBI’s Expected Repo Rate Cut on Homebuyers HTTPS://WWW.INDIAPROPERTYDEKHO.COM/

  2. IMPACT OF RBI’S EXPECTED REPO RATE CUT ON HOMEBUYERS With the recent meeting being scheduled with RBI; the real estate experts believed that this is the right point of time to look forward to cutting down the repo rate. As per recent reports the repo rate current is around 6.5 per cent Additionally, as the repo rates are higher it would directly impact the interest rate and make it higher on the home loan lent out to the homebuyers. For the eleventh time, RBI has maintained the same percentage repo rate which led to the belief that as per the real estate and RBI policy, the repo rate should be slashed in the meeting scheduled. 01

  3. When repo rate changes it further impact onto the cost of purchasing a house that would further lead towards impacting the economic growth of the country. Previously a reduction in the repo rate was expected but however it didn’t happen. As per the RBI Monetary Policy Updates the affordable home loans could lead towards offsetting the prices of properties that are rapidly increasing which eventually impact the pockets of homebuyers. THE RBI REPO RATE OF 6.5 PERCENT IMPACTS LOANS IN SUCH A WAY THAT BOTH THE HOME LOAN RATES AS WELL AS MONTHLY INSTALLMENTS ARE UNCHANGED; TO EASE LIQUIDITY CASH RESERVE RATIO HAS BEEN PROVIDED. FURTHER, IT WAS MENTIONED BY ONE OF THE FORMER EXPERTS THAT THE HIGHER INTEREST RATES OO THE HOME LOANS FOR A LONGER PERIOD WOULD EVENTUALLY CUT OFF THE CUSTOMER’S SPENDING AND LEAD TOWARDS AN ECONOMIC SLOWDOWN. HOWEVER, AS THE DEMAND FOR REAL ESTATE INCREASES, IT BENEFITS THE DEVELOPERS AS THEIR UNSOLD INVENTORY WOULD GET CLEARED UP AND THEY WOULD BE ABLE TO LAUNCH NEW PROJECTS. IF ANY REDUCTION IN THE INTEREST RATES OF HOME LOANS WOULD EVENTUALLY AFFECT THE PEOPLE WHO ARE PURCHASING PROPERTY UNDER THE PMAY HOUSING AFFORDABILITY OPTION AS A RESULT OF ENHANCED MARKET STABILITY, THERE WOULD BE A MINOR DIFFERENCE BETWEEN THE TWO. 03

  4. RBI REPO RATE 6.5 PERCENT IMPACT ON LOANS The RBI Repo Rate 6.5 percent impact on loans in such a way that both the home loan rates as well as monthly installments are being unchanged; in order to ease liquidity cash reserve ratio has been provided. Further it was being mentioned by one of the former experts that the higher interest rates on to the home loans for a longer period of time would eventually cut off the customer’s spending and lead towards an economic slowdown. However, as the demand of real estate’s increases it benefits the developers as their unsold inventory would get cleared up and they would be able to launch new projects. If there would be any reduction in the interest rates of home loan it would eventually affect the people who are purchasing property under PMAY Housing Affordability option as a result of enhanced market stability, there would be minor difference between the two.

  5. HOME LOAN SAVINGS EXAMPLE Taking a Home loan savings example in order to have a better understanding; let us assume that a 50-lakh home loan is being taken for a time period of 20 years. As per the current scenario the repo rate is 6.5 percent and home loan interest rate is 8.5 percent providing a monthly EMI of 43391 that would provide total interest payable as 54.14 lakh. Now let us assume that the repo rate is being reduced to 5.50 percent leading to the reduction in home loan interest rate to 7.5 percent then the monthly EMI would be paid will be 40280 with the total interest payable of 46.67 lakh. Evaluating the above example the total monthly savings would be 3111 on EMI that would provide a total savings of 7.47 lakh. Further the home loan interest rates 2024 are, for SBI the normal home loan interest rate lies in between 8.7 percent to 9.65 percent. For HDFC bank the home loan interest rates as per current scenario lie in between 8.75 percent and 9.65 percent while for ICICI the home loan interest rate is 8.75 percent. 04

  6. Thank You +91 87501 08087, +91 87501 08088 https://www.indiapropertydekho.com/ support@indiapropertydekho.com Sector 48, Gurugram, Haryana 12200

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