What the RBI’s Monetary Policy Announcements Mean for Buyers
New Delhi: RBI Governor Shaktikanta Das said today that the significant reduction in interest rates on personal home loans and loans to the commercial real estate sector bodes well for the economy. When announcing the bimonthly monetary policy review, the Governor of the Reserve Bank of India indicated that these segments are employment-intensive, according to a PTI report.Also Read – Indian Post Payment Bank, HDFC To Offer Home Loan Over 4.5 Crore. The best details here
Impact of RBI Monetary Policy on Mortgage Interest Rates
- âThe effectiveness of the RBI’s monetary policy actions and actions is reflected in the significant improvement in transmission during the current easing cycle. The 250 basis point repo rate reduction since February 2019 has resulted in a cumulative 217 basis point decrease in the weighted average lending rate (WALR) on new rupee loans, âthe RBI Governor said.
- âThe low interest rate regime has also helped the household sector reduce the burden of servicing loans,â Governor Das said.
- The significant reduction in interest rates on personal home loans and loans to the commercial real estate sector bodes well for the economy as these sectors have extensive backward and forward linkages and are intensive jobs, âGovernor Das said.
- Since the RBI kept its key rates unchanged, the low interest rate regime on home loans will likely continue to offer buyers the opportunity to invest in the home or apartment of their dreams.
- As the low interest rate cheers homebuyers, real estate experts say a further cut would have boosted demand even further.
- âWhile consumers are currently benefiting from low mortgage rates, a drop would have further intensified demand. Maintaining a low interest rate plan works well for borrowers. There is a need for stimulating policy measures that would improve and relax credit arrangements and increase buyer confidence. Any announcement in these forms would have been appreciated, âsaid Lincoln Bennet Rodrigues, founder and president of the Bennet & Bernard group.
- “The regular home buyer would of course benefit from the low interest rates that currently prevail, but aggregate real estate demand on a holistic level would have increased further, thereby boosting the economy,” Ramani Sastri, President and CEO, Sterling Developers Pvt. Ltd said.
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