RBI keeps repo rate unchanged at 6.5% – What it means for homebuyers?
In a major relief to homebuyers, the Reserve Bank of India (RBI) on Friday unanimously decided to keep the repo rate unchanged at 6.5 per cent in its monetary policy meeting. The apex bank continues to keep its focus on controlling inflation as external factors continue to keep the pressure on the internal economic situation in the country.
When the RBI keeps the repo rate unchanged, it means that the central bank is maintaining the current level of interest rates at which it lends money to commercial banks. Homebuyers are cautious as their loan tenures have gone up. Rising EMIs is posing challenges to many existing borrowers who would get more time to make prepayments to rationalise their loan interest rates.
Adhil Shetty, CEO, Bankbazaar.com, says, “RBI expectedly kept the policy rates paused in its monetary policy review for October. With this the repo rate remains paused at 6.50 per cent since February 2023. The RBI’s view is that developed economies are nearing a peaking of rates. This is welcome, although inflation is expected to remain elevated for longer than anticipated.”
Also Read: How does a monthly reducing loan help a home loan borrower?
The RBI decision can have the following implications for homebuyers:
The repo rate directly influences the interest rates offered by commercial banks on various loan products, including home loans. When the RBI keeps the repo rate unchanged, it implies that banks are unlikely to change their lending rates immediately. Homebuyers may benefit from stable or unchanged interest rates, as it means their EMI will remain consistent, making it easier to plan their finances.
Shetty says, “Homebuyers will welcome the pause on the repo rate though they would also hope for a rate cut
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