Rbi Governor Sanjay Malhotra, giving a big relief to crores of people of the country, today announced a cut of 50 basis points i.e. 0.50 percent. After this latest cut, the repo rate has now come down from 6.00 percent to 5.50 percent. With the repo rate, now all bank loan interest rates will also be reduced, which will give loans at cheap rates to common people. Due to cheap loan, EMI of all loans like home loan, car loan will also decrease, due to which people will now be able to save more. Here we will know what will affect your home loan EMI due to reducing the repo rate and how much you will save.
What will affect EMI
Here we will try to explain EMI calculation with the example of State Bank of India. SBI is currently giving home loan at interest rates of 8.00 percent. After today’s decision of RBI, the initial rates of SBI’s home loan will decrease from 8.00 percent to 7.50 percent. Which will also reduce your monthly EMI.
How much will be saved in a year
Suppose you took a home loan of Rs 50 lakh for 30 years at an interest rate of 8.00 percent from SBI. For this, you have to pay an EMI of about Rs 36,688 every month. After the repo rate is reduced, the loan will become cheaper and you have to pay the loan at 7.50 percent. You will have to pay an EMI of about Rs 34,961 every month for a home loan of Rs 50 lakh for 30 years at 7.50 percent. In this way you will save about Rs 1727 every month. According to this, around 20,724 rupees will be saved every year.
Home loan is available at floating rate
But you have to keep in mind here that most banks give home loans at floating rate. Floating rate means that as RBI repo rates, your loan interest rates and EMI will also decrease. Similarly, when the RBI increases the repo rate, your loan interest rates and EMI will also increase.
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