New Delhi: The Reserve Bank of India is set to give people some good news today, which is being discussed rapidly. The Reserve Bank will share information about the decision taken in the Monetary Policy Committee meeting shortly. RBI Governor Shaktikanta Das will announce the change in the repo rate at 10:30 am. It is believed that this time the repo rate can be cut.
If this happens, borrowers can get relief from interest. If media reports are to be believed, this cut can be from 2 to 50 points. According to the RBI research report, it is expected to announce a reduction of 0.50 per cent, or 50 basis points, in the repo rate. The report stated that the RBI is attempting to accelerate the cycle of expenditure and mitigate the effects of current economic uncertainties.
Interest on home loans will be reduced.
If, for some reason, the RBI reduces the repo rate by 25 basis points today, then the repo rate will come down to 5.75 per cent. Following this, after a 50-basis-point reduction, the rate will be lowered to 5.50 per cent. Currently, the repo rate stands at 6 per cent.
For example, if the bank charges 9 per cent interest on a home loan, then after a 25-basis-point reduction, it will come down to 8.75 per cent, and after a 50-basis-point reduction, it will remain at 8.50 per cent. Customers will directly benefit from the reduction in the repo rate. Due to this, you will need to make a slightly lower monthly EMI payment.
How much will the EMI reduce on such a loan?
For your information, we would like to inform you that a home loan of ₹ zero lakhs has been taken from the bank for a term of 30 years. In return, you pay up to 9 per cent interest. According to this, your monthly EMI will go up to Rs 40,231. Following a 50-basis-point reduction in the RBI’s repo rate, this EMI will decrease to Rs 38,446 only.
There is a possibility of a reduction of Rs 2000 in the monthly EMI. Therefore, all eyes are on the RBI’s press conference today. If the repo rate is reduced, then the borrowers will be in for a treat.