Home loans are about to get cheaper as the Reserve Bank of India slashed the repo rate by 25 basis points. The current repo rate is 6 percent. The Central Bank reduces the repo rate to 6.25% in February’2019 after 18 months. This is the second cut in the repo rate in the year 2019, which brings a respite to the real estate sector.
The real estate experts believe that the rate cut will bring a smile on the face of fence-sitting buyers and revive the Indian real estate market by pushing the property demand. When RBI hiked the repo rate by 50 percent, home loan interest rates have risen greatly and adversely affected the housing demand. This rate cut will definitely impact the consumer sentiments in a positive manner by lowering down the home loan EMI’s amount. Even real estate developers feel ecstatic as they feel this is the best time to introduce a rate cut. The festival of Chaitra Navratri is commencing from 6th April and property buyers consider Navratri days as an auspicious time to buy properties. The rate cut will motivate prospective homebuyers to invest in the property now.
With the cut in repo rate, even EMI’s of personal and car loan is bound to reduce. Repo rate is the rate at which banks take money from the RBI. With a reduction in repo rates, reduction in lending rates bound to follow.