RBI Gift: How Much Will You Save on Home Loans of Rs 20 Lakh and Rs 50 Lakh?
The Reserve Bank of India reduced the repo rate by 25 basis points in its monetary policy review. This decision brought relief to lakhs of people especially those who are thinking of taking a home loan or who have already taken a home loan.
Let us tell you that the reduction in the repo rate directly impacts the interest rates of home loans, which in turn reduces the EMI and makes it easier for people to fulfill their dream of owning a home.
The amount of savings that borrowers can achieve due to the reduction in the repo rate on home loans depends on the loan amount, interest rate, and loan tenure.
Suppose you have taken a home loan of Rs 20 lakh for 20 years at an interest rate of 9%. After the RBI cuts the repo rate by 25 basis points, your interest rate could be 8.75%. In this situation, your EMI will decrease, and you will also save a lot in total interest.
Economy will give a new boost due to repo rate cut
Nimbus Group CEO Sahil Aggarwal commented on this decision, saying, “In today’s monetary policy meeting, there was full expectation of a 25 basis point cut, and the RBI fulfilled it.” He further stated, “The main reason for this decision is to support GDP growth, keep inflation under control, and overcome the liquidity crunch.”
Bankbazaar.com CEO Adhil Shetty told ET Bureau, “This was the first Monetary Policy Committee (MPC) meeting chaired by the new RBI Governor Sanjay Malhotra.” He emphasized that “This decision to reduce the interest rates on home loans, auto loans, and business loans will make loans cheaper, increase spending and investment, and boost economic activity.”