Indian Real Estate has been going through various stages of transformation ranging from Impact of Demonetization, Implementation of RERA, change to GST regime, Subsequent changes in GST and so on and so on. Acts like RERA have brought transparency in the sector and consumer confidence has started to come back in the industry. A customer has a lot of options to choose from but still, a customer looks for more positive signals to buy and invest
RBI has reduced rate of interest many times in the last one year but comparatively, HFC/Banks and other financial institutions have not reduced the rate of interest. For long, banks have failed to pass on the RBI’s policy rate cuts fully, but have been quick to raise rates when the reverse happens. The common reason given by banks for this is the higher internal cost of funds
Developers and homebuyers have been complaining about long about the above-said problem.
It has finally been solved with Reserve Bank’s latest directive that all new floating rate of personal or retail loans (housing, auto, etc.) and floating rate loans to Micro and Small Enterprises extended by banks from October 01, 2019, will have to be linked to an external benchmark.
A nudge from the Reserve Bank of India (RBI) has resulted in several public sector banks linking their home loans to the repo rate, a move that will benefit borrowers in the case of a rate cut. Repo rate is the rate at which banks borrow from the RBI.
The State Bank of India (SBI) rolled out its repo-linked lending rate (RLLR) home loan in July. Bank of Baroda (BoB) and Syndicate Bank have followed suit, while other public sector banks (PSBs) like Union Bank of India, Canara Bank, and others.
Considering that the RLLR home loans are 25-45 bps cheaper than MCLR-linked loans, existing borrowers will gain substantially.
This was long needed and with this directive, home loan borrower will get the immediate benefit if any rate of interest is reduced.
Reduced rate of interest not only lowers the EMI burden but also increases the loan amount eligible for the borrowers.
This is the best time for the buyers to buy the dream home.
Gaurav Gupta | SG Estates Ltd
SG Estates Ltd has been a prominent developer operating in different parts of Ghaziabad and has delivered various projects in Vasundhara, Govindpuram and Raj Nagar Extn. in Ghaziabad.
Ongoing projects of the company are SG Grand in Raj Nagar Extn. and SG Shikhar Height in Sidharth Vihar.