Repo rate-linked loans drop fast, but MCLR and new loans may lag When will your home loan EMI fall post RBI rate cut? With the recent 25 bps reduction in the repo rate, banks are expected to lower home loan rates for both new and existing borrowers. But the key question remains: How soon will this rate transmission?
Repo Rate-Linked Loans Drop Fast, But MCLR and New Loans May Lag
In a significant move, the Reserve Bank of India (RBI) has recently reduced the repo rate by 25 basis points. This decision is expected to send ripples through the banking sector, particularly impacting home loan rates for both new and existing borrowers. But the lingering question on everyone’s mind is: when will your home loan EMI fall?
Understanding Rate Transmission
Repo rate-linked loans, often more responsive to RBI changes, are likely to see quick adjustments. Borrowers with loans linked to the repo rate can expect their EMIs to drop soon. However, the same cannot be said for those with loans linked to the Marginal Cost of Funds-based Lending Rate (MCLR) or fixed-rate loans. The transmission of the repo rate cut may take longer for these categories, leaving some borrowers in a state of anticipation.
What Should Borrowers Do?
If you are currently paying EMIs on a home loan, it’s time to check with your bank regarding the potential for reduced rates. The speed of this adjustment can vary from one financial institution to another. Many banks may take their sweet time to align their rates with the latest RBI directive, leaving some borrowers waiting longer than expected.
New Loans: To Wait or Not to Wait?
For those looking to take out a new home loan, the current scenario may prompt one to wonder if waiting for a better rate is wise. While it’s tempting to hold off, it’s essential to remember that the housing market is dynamic. Locking in a mortgage now may still be beneficial if rates do not fall as expected. Tools like Looffers.com can help you compare loan offers across various banks, ensuring you secure the best deal possible.
Final Thoughts
The recent repo rate cut is a positive development for home loan borrowers. While repo rate-linked loans will see a prompt reduction in EMIs, those on MCLR or fixed rates may experience a delay. If you’re considering a new loan, don’t hesitate to explore your options. Visit Looffers.com today to find the best home loan offers tailored to your needs!
