Recently, I came across a borrower who had opted for ICICI Smart Fix Home loan. Under this loan product, your loan is fixed rate for a few years (3 years in this case) and thereafter becomes a floating rate loan. Intuitively, such a loan product could be useful if you expect interest rates to go… Continue Reading
The Reserve Bank of India recently cut Repo rate by 0.25% from 6.25% p.a. to 6.0% p.a. You have heard that the rate cut by the Reserve Bank will lead to lower EMI. However, despite this rate cut, let’s say, your loan EMI has not gone down. What could be the reasons and what can… Continue Reading
RBI has increased repo rate from 4% p.a. to 6.5% p.a. since May 2023. If your home loan is benchmarked to RBI Repo rate, that means a hike of 2.5% in your home loan interest rate. Impact of Interest Rate Hike on Your Loan Tenure Usually, the default option in case of interest rate hike… Continue Reading
The Reserve Bank has hiked the Repo rate in the first week of May 2022. If your home loan is linked to Repo rate or to any external benchmark, you will soon see one of the following things happen. EMI stays constant and the outstanding loan tenure goes up (that is the usually the default… Continue Reading
RBI has reduced the repo rate from 4.4 percent to 4.0 per annum. If your home loan or any other loan is linked to the Repo rate, this is good news for you. RBI Repo rate has moved down sharply in the last 10-12 months. Repo Rate Reduction Date 6.25% to 6% April 4, 2019… Continue Reading
While all of us are staying at home amidst Covid 19 scare, all the expenses including the loan EMIs must still be paid. The salaried employees shouldn’t have much to worry, at least in the very short term since they will continue to get their salaries. However, a certain segment of self-employed, professionals, shopkeepers and… Continue Reading
All the banks linked the new retail floating rate loans to an external benchmark from October 1, 2019. In my opinion, that makes the comparison between various home loan products easier. Most of the banks have chosen Repo rate for the external benchmark for home loans. Earlier, benchmark MCLR (Marginal cost of funds-based lending rate)… Continue Reading
The bank must link all new floating rate loans to retail customers loans from October 1, 2019 to an external benchmark. The Reserve Bank notified the change in its circular dated September 4, 2019. This means MCLR will soon be history, at least for retail borrowers. Starting October 1, no new floating rate loans will… Continue Reading
SBI had introduced home loans linked to RBI Repo rates as the benchmark in July 2019. This was before the RBI mandated all fresh floating rate loans to retail borrowers from October 1, 2019 to be linked to an external benchmark. SBI had used Repo rate linked lending rate (RLLR) as the benchmark. RLLR was… Continue Reading
The Reserve Bank of India has cut Repo rate by 110 basis points since the beginning of the year (2019). However, the banks have reduced their weighted average lending rates by 29 bps. If you have a floating rate home loan, then this news is not very comforting. This is a very common grievance for… Continue Reading