Dream Home: Buying your own home is everyone’s dream. However, not everyone has the necessary budget to buy a house. For this, we resort to home loans. However, it is essential to take out a home loan at the right time. Before taking a home loan, you should make a decision keeping in mind the interest rate, market conditions, your financial situation, and government policies. But, the question is, will it be right to take a home loan now? Let us know in detail. This information will help you make an important investment decision.
RBI’s repo rate cut brings relief
RBI has reduced the repo rate by 25 bps from 6.50 percent to 6.25 percent in its February MPC meeting. Atul Monga, co-founder and CEO of Basic Home Loans, says that the Monetary Policy Committee has cut the rate for the first time in five years. Based on this, financial institutions have also reduced the interest rate of home loans. This is a big relief for those who want to take a home loan. This move is a positive sign for home buyers.
Small and consistent savings on EMI
According to Atul Monga, RBI’s decision has benefited consumers taking home loans. This will reduce their loan cost and make it easier to buy a house. Due to the reduction in the interest rate, their EMI will be reduced, which will reduce the financial burden on home buyers. Let’s understand its calculation.
For example, suppose you have taken a loan of Rs 30 lakh at a rate of 8.75 percent for 30 years. Earlier your monthly EMI was around Rs 23,601. However, now due to the change in the interest rate, their EMI will be reduced to Rs 23,067. In this way, there will be a total saving of Rs 1,92,098. If you pay EMI equal to the earlier amount, your loan will end sooner. This saving will help you get your dream home sooner.
Home Loan Refinance Options
Many times, home loan borrowers may find that their monthly EMI has decreased slightly. But, this small reduction will also give them the benefit of big savings in the long run. If your credit score is good, you can get the option of refinancing at an even better interest rate. Banks and financial institutions also offer loans keeping in mind the low risk. This option allows you to improve your financial position even more.
The housing sector will gain momentum
RBI wants to boost economic growth by making housing more accessible. This will increase the demand for residential properties, especially in areas where infrastructure is available and property prices have increased due to better facilities. In such a situation, getting loans at a lower interest rate, especially in metros, will reduce the pressure caused by high property prices. This move will bring a new impetus to the housing sector.
Government schemes and tax exemptions
The government also runs schemes to help home buyers. For example, if you buy a house for the first time under the Pradhan Mantri Awas Yojana (PMAY) scheme, you will get the benefit of a subsidy. You can also avail tax exemption on home loans under section 80C and 24 (b) in the old tax system. If you take a joint home loan with your wife or mother, you can get some additional discount on the interest rate. This benefit will make your dream home even more affordable.
Keep these things in mind while buying a house
Your financial situation is the most important thing when taking a home loan. You should ask yourself some questions.
Is your monthly income stable?
Do you have an emergency fund?
Are you ready to bear the burden of EMI?
Have you saved enough for the down payment?
If your financial position is strong and you can make long-term plans, then taking a home loan now can be a good option. Economic experts believe that RBI may cut the repo rate further this year. You will also get the benefit of this. This information will help you make the right decision