Monday, 9 March 2015

Good news for Home buyers!

5 days following the Union Budget 2015 was presented; RBI Governor has very recently given thumbs up for the cut in repo rate by 25 basis points pulling it at 7.5%. The unexpected cut came with the evolution of disinflation along the path set by the reserve bank of India at a more rapid pace than envisaged earlier.

The question that arises next to this repo rate cut is that will the banks pass on the benefits of this rate cut to the customers? Well, the bank analysts and experts do really think so.

While there’s a lot of a talk about the cut in repo rate, let us first know about it:

Repo rate is the rate at which the reserve Bank of India lends money to all the commercial Indian Banks in case of funds’ shortage. It is used by monetary authorities in India to control inflation in the country.

Thus, RBI has obviously signaled a lower interest rate regime cutting Repo rate and banks in the following time are expected to drop the interest rates. Thus, there may be very good news for the consumers in the coming time of reduced EMIs.

In the last 2-3 months, RBI has overall made a cut of 50 base points in the repo rate. Of course, the entire cut would not be available for the customers to avail benefits but EMIs are certain to come down marginally. The banks will surely pass on some good fraction of the cut 50 bps of the repo rate to the consumers very soon.

Experts have already examined the cut to put a positive impact on the real estate sector. The rate cut implemented by RBI along with the present rate cut sums to 0.5%, which is very much capable of providing an enhancement to the lending power of the banks.

The very simple arithmetic of the reversing rate cycle is signaling the bank interest rates to come down. This will in turn, smoothen the path of the prospective buyers finding the best projects in the lowest rates. In such a scenario, going for projects like Lotus Arena Noida offering 3 and 4 BHK apartments in the heart of the city would be much easier as well as affordable for the buyers. The project complimented by a range of high class facilities would now be accessible by the common man paying a marginally lower EMI for the repayment of his home loan. 

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