Outlook Business Desk
Earleir this week, the Reserve Bank of India (RBI) reduced the repo rate to 6.00%. This reduction aims to stimulate economic growth and directly impacts interest rates across various loans, including home loans.
Following the RBI repo rate cut, many public sector banks are likely to reduce home loan interest rates, providing an opportunity for borrowers to secure loans at more affordable rates.
According to Policybazaar, Union Bank of India offers home loan interest rates starting at 8.10% per annum. Central Bank of India provides rates starting from 8.10% to 9.60% per annum. Bank of Maharashtra offers rates starting from 8.10% to 10.90% per annum.
According to PolicyBazar, Canara Bank, Bank of Baroda, and Punjab National Bank offer home loan rates starting at 8.15% per annum, while State Bank of India and Punjab & Sind Bank have rates beginning at 8.25%.
Home loan interest rates are influenced by several factors, including credit score, loan amount, and tenure. A higher credit score can lead to lower interest rates, while larger loan amounts or longer tenures may result in higher rates.
Repo rate-linked loans offer transparency, as they directly reflect changes in the RBI’s repo rate. Borrowers can benefit immediately from rate reductions, potentially saving on overall loan costs.
Along with interest rate adjustments, many banks like ICICI Bank, Axis Bank, State bank of India revised their lower loan processing fees. Combined with reduced interest rates, this can make home loans more affordable for borrowers
The RBI’s monetary policy decisions, such as repo rate cuts, directly influence banks’ lending rates. Lower repo rates lead to reduced borrowing costs for banks, allowing them to pass on the benefits to customers.