Benifits of 0.25% Cut in Home Loan Rate..!

The RBI (Reserve Bank of India) recently announced certain monetary measures in its 3rd quarter review.

 Major key policy measures are..!

  ** . 0.25 per cent reduction in repo rate from 8 per cent to 7.75 per cent.

** Reduction of bank rate to 8.75 per cent

** Reduction of Cash Reserve Ratio (CRR) by further 0.25 per cent to 4 per cent

Cash reserve ratio, the share of deposits banks must keep with the central bank, by an equal amount.

The CRR cut to 4 % -  an all-time low will infuse an extra Rs 18,000 core into the banking system.

In the short term, there’s good news for customers as banks are set to reduce their base rate, which will reduce interest rates across the board. Public sector bankr IDBI Bank has already reduced its base rate by 0.25 % to 10.25 % and some deposit rates by the same measure. Some bankers, however, say their deposit rate might come down only after a lag.

Mr. Pranab Datta, Chairman, Knight Frank India said,"Finally, we have the rate cut, which coupled with the lower CRR should provide great relief to Real Estate industry reeling for quite some time now under the burden of huge debts on one side & poor cash flows caused by slowdown in sales. The consequential drop in housing loan rates will greatly benefit consumers and stimulate demand for new housing”

Developers Welcome..!

The real estate developer community has welcomed the move, saying the cut in CRR would ease fund flow.

For many prospective house buyers, it is a good time to invest in real estate. For the developers too, this should provide a boost in a somewhat slow market. The RBI unexpectedly also reduced the CRR.

The Benifits of 0.25% cut in Home Loan rate are given below.

Assumed that rate has been cut from 11 % to 10.75 %

Amount Rs.         Repayment Period   Reduction in EMI in (Rs.)

                                (in Years)

20 lakh                           15                                   312

  

50 lakh                            15                                  782 

1 Crore                            15                                 1,565

20 lakh                            20                                    339

50 lakh                            20                                    848

1 Crore                            20                                   1,696

Share: