RBI Keeps Policy Rate Unchanged: What Does it Mean for Home Loan EMIs?
The Reserve Bank of India's decision to keep its policy rate unchanged at 6.5% may not bring immediate relief to home loan borrowers, but experts believe it's a positive sign for the real estate sector.
Rbi Policy RateHome Loan EmisReal Estate SectorSbi Loan Interest RateNeolivSignature Global India LtdReal Estate NewsAug 08, 2024
In the third bi-monthly monetary policy statement for the current financial year, Das noted that the MPC will remain vigilant about high food inflation. The RBI has also maintained its growth projection at 7.2% for the fiscal year.
For home loan borrowers, this decision means there will be no immediate relief in Equated Monthly Installments (EMIs), as the rate cut cycle remains on hold. Borrowers will continue to face elevated rates until a reduction in rates is eventually implemented. Similarly, EMIs for vehicle and other types of loans are expected to stay steady in the near term.
The RBI's rate increase cycle was paused in April 2023 after a series of six consecutive rate hikes, totaling 250 basis points since May 2022.
As of July 2024, the State Bank of India (SBI) has adjusted its Marginal Cost of Funds Based Lending Rate (MCLR) across various tenures. The one-month MCLR benchmark rate has risen by 5 basis points to 8.35%, while the three-month MCLR has increased by 10 basis points to 8.40%. Additionally, the bank has raised the MCLR rates for six-month, one-year, and two-year tenures by 10 basis points each, setting them at 8.75%, 8.85%, and 8.95%, respectively. The three-year MCLR has also been increased, by 5 basis points, reaching 9%.
Mohit Malhotra, Founder and CEO of NeoLiv, welcomed the RBI's decision, calling it a positive development for the real estate sector. He said,
Frequently Asked Questions
What is the current policy rate of RBI?
The current policy rate of RBI is 6.5%.
How will the RBI's decision affect home loan EMIs?
The RBI's decision to keep the policy rate unchanged means there will be no immediate relief in home loan EMIs, as the rate cut cycle remains on hold.
What is the growth projection of RBI for the fiscal year?
The RBI has maintained its growth projection at 7.2% for the fiscal year.
How has SBI adjusted its MCLR rates?
SBI has adjusted its MCLR rates across various tenures, with the one-month MCLR benchmark rate rising by 5 basis points to 8.35%, and the three-month MCLR increasing by 10 basis points to 8.40%.
What is the impact of RBI's decision on the real estate sector?
Experts believe that the RBI's decision to hold the repo rate at 6.5% is a positive sign for the real estate sector, and may lead to increased buyer confidence and a positive impact on home-buying decisions.
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