New Delhi, 6 June (IANS). Reserve Bank of India Governor Sanjay Malhotra on Friday announced to increase the repo rate to increase the repo rate by cutting a 50 basis points to 6 percent to 5.5 percent to increase the pace of development of the economy.
The repo rate is the rate on which RBI gives loan to banks. If it is reduced, it will be cheaper for banks to take a loan from a central bank and they will also be able to pay loans to customers at cheaper rates.
In such a situation, the repo rate reduced by 50 basis or 0.50 percent and the direct impact will be on your home loan EMI. Let us understand it by example.
For example, if you have taken a home loan of Rs 50 lakh for 20 years at an interest of 8.50 percent, then you had to give EMI of Rs 43,391 per month.
But after the repo rate cut, the interest rate will be 8 percent. With this, you will now have to pay Rs 41,822 as EMI.
Due to the low interest rates, you will have to pay 1,569 rupees in EMI on a loan of Rs 50 lakhs with a duration of 20 years and you will be able to save about Rs 18,828 per year.
CREDAI secretary Gaurav Gupta says that the repo rate cut of 50 basis points in RBI monetary policy is welcome step. This will help in reducing interest rates for home buyers.
He further stated that the reduction of interest rates not only helps in reducing costs for home buyers, but also increases real estate affordability. This will have a positive impact on all the sectors of the country.
Reduction in repo rate, not only a home loan, but also reduces the EMI of personal loans, car loans and other types of loans.
By reducing the interest rates, the central bank’s effort is to increase the growth rate of the economy.
According to the central bank, the GDP growth rate may be 6.5 percent in the first quarter of the financial year 2026, 6.7 percent in the second quarter, 6.6 percent in the third quarter and 6.3 percent in the fourth quarter.
-IANS
ABS/