6 Major Banks Cut Home Loan Interest Rates After RBI Repo Rate Reduction — How Your EMI Will Benefit
Following the Reserve bank of India’s (RBI) recent repo rate cut, six major banks have announced a reduction in home loan interest rates, offering relief to borrowers across the country. The RBI reduced the repo rate by 25 basis points to 5.25% in its december policy meeting, triggering adjustments in lending rates by commercial banks.Banks That Have Reduced home Loan RatesThe following major banks have lowered their home loan interest rates following the RBI announcement:1. State bank of india (SBI)2. HDFC Bank3. ICICI Bank4. Axis Bank5. Punjab National bank (PNB)6. Bank of Baroda (BoB)The exact reduction ranges from 0.05% to 0.20%, depending on the bank and the loan category.Impact on EMIsLower home loan rates mean reduced Equated Monthly Installments (EMIs) for borrowers. Here’s how a typical reduction can impact borrowers:· Example:o Loan Amount: ₹50 lakho Tenure: 20 yearso Previous Rate: 7.50% → EMI: ₹39,124o New Rate (after reduction to 7.30%): EMI: ₹38,712o Monthly Savings: ₹412o Total Savings over Loan Tenure: ₹98,880Even a small reduction in interest rates can lead to substantial savings over the long term.Why Banks Cut Rates After Repo Rate Change· Banks usually adjust lending rates in line with the RBI’s repo rate, which is the rate at which RBI lends to commercial banks.· A repo rate cut lowers the cost of funds for banks, enabling them to offer cheaper loans to borrowers.· This move encourages housing demand and provides relief to existing home loan borrowers.How Borrowers Can Benefit1. Check Eligibility for Rate Revisions:o Existing borrowers with floating rate home loans may automatically benefit.o Fixed-rate borrowers may consider top-ups or refinancing.2. Compare Offers:o Look at processing fees, prepayment charges, and other terms before switching loans.3. Use EMI Calculators:o Calculate the new EMI and total interest savings before making any decision.ConclusionThe RBI’s repo rate cut to 5.25% has provided an opportunity for borrowers to reduce their EMIs and save on interest payments. home loan borrowers should check with their banks for updated interest rates and explore options like loan refinancing or top-ups to maximize benefits. Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.