The RBI announced a decrease in interest rate on 7 February. RBI Governor Sanjay Malhotra said that the repo rate is being reduced from 6.5 per cent to 6.25 per cent. This was already expected. The central bank has announced a decrease in repo rate after 5 years. This will provide great relief to the people taking home loans. Let’s know how much relief they will get.
EMI of home loan with floating rate will decrease
All retail floating rate loans released from October 1, 2019 are linked to an external benchmark. In most cases this external benchmark repo rate. This means that the change in repo rate will directly affect the rate of such home loan. On February 7, after the announcement of reduction in repo rate, such a home loan (Home Loan) The interest rate will decrease. Banks will start reducing the interest rate of home loan customers with their floating rate. This makes your home loan EMI Will decrease
Interest rate has decreased after 5 years
Home loan customers have been waiting for the EMI of home loan to decrease for the last several years. In 2020, RBI started the process of raising the repo rate. He had increased the repo rate by 7 times to prevent inflation from growing. This increased the repo rate from 4 percent to 6.5 percent. Now after inflation is largely under control, the central bank has decided to reduce the repo rate. Due to this, it has come down from 6.5 percent to 6.25 percent.
EMI of your loan will decrease like this
We can understand the benefits of reducing repo rate with the help of an example. Suppose you have taken a home loan of 50 lakh rupees a year ago. Its interest rate is 9 percent. Its period is 240 months i.e. 20 years. Your EMI will come around Rs 44,986. In this way, you will spend around 58 lakh rupees for paying interest in a 20 -year period. Adil Shetty of Bankbazar.com says that the reduction in repo rate will reduce the interest rate of people taking home loans. This means that the interest rate will decrease from 9 percent to 8.75 percent.
New customers of home loan will also benefit
With the interest rate of 8.75 percent, your total expenditure on interest will be reduced to 53.6 percent. In this way your total savings will be Rs 4.4 lakh. Apart from this, the period of your loan will be reduced to 230 months. This means that your loan will end 10 months in advance. Experts say that those who were waiting for a decrease in interest rate to take home loans will now be able to get a loan at a low interest rate. This will reduce their EMI from the beginning.