The Reserve Bank of India’s Monetary Policy Committee (MPC) on Friday chose to maintain the repo rate at 6.5 per cent, affirming its dedication to stability while gradually scaling back accommodation to align inflation with the 4 per cent target. This stability is likely to bolster sentiments in the real estate sector, which is already experiencing positive trends in key markets across the country. Furthermore, consistent lending rates have the potential to encourage investments, fostering economic growth.
The RBI decision holds significant implications, particularly for both the existing and new home loan borrowers across the country. This acts as a crucial determinant in shaping lending rates, directly influencing the borrowing landscape for individuals seeking home loans. Here is how it will impact home loan borrowers.
The unchanged repo rate brings a sense of stability for individuals with existing home loans. This decision implies that the interest rates on their current loans are unlikely to witness immediate fluctuations. Borrowers can breathe a sigh of relief as the Equated Monthly Instalments (EMIs) they have been accustomed to remain unchanged, at least in the short term. This consistency allows for better financial planning and budgeting, sparing borrowers from the anxiety of sudden rate hikes that might strain their finances.
However, it’s essential to note that while the repo rate remains steady, existing borrowers might not immediately benefit from potential rate reductions. Any future changes in lending rates depend not only on the repo rate but also on the policies and strategies adopted by individual banks or lending institutions. Therefore, existing borrowers should keep a keen eye on the policies of
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