look news india
RBI keeps repo rate intact: RBI has not made any change in the repo rate in the eighth consecutive bi-monthly meeting. As a result, home loan holders will have to wait longer for relief. The repo rate has remained stable at 6.5 percent for the last one and a half years. To curb rising inflation, the repo rate was increased to 6.5 percent in February 2023.
RBI has linked the retail floating rate loans given by all banks to the report rate. However, due to the repo rate remaining unchanged, there will be no additional burden on the EMI of the borrowers.
Interest rates may fall in the second half of the year
Various economists have expressed hope that the RBI will start cutting interest rates from the second half of the financial year 2024-25. Inflation has remained within the comfort level of the RBI for some time now. So if there are no economic challenges in the future, interest rates may come down.
Repo rate at pre-Covid low of 4 percent
Before the Covid pandemic, the repo rate was 4 percent till October 2020. But due to the fear of economic recession and rising inflation due to the pandemic, the repo rate was increased to 2.5 percent.
There is no obligation on loan EMI
There will be no increase in EMI of home loan holders. Repo rate is applicable only on RLLR linked loans. Therefore, the change in the report rate affects the EMI of this type of loan takers. But the home loan taken on MCLR is not linked to the repo rate. The bank determines the interest rates as per the guidelines of RBI. In many cases, the interest rates on repo linked loans are higher than MCLR. Therefore, you can compare interest rates by getting information about your loan rate while taking a loan.
