The Reserve Bank of India (RBI) last week kept its benchmark repo rate unchanged at 5.25 per cent, as expected.
The Monetary Policy Committee (MPC) unanimously voted to leave the policy repo rate unchanged at 5.25 per cent, and continue with its “neutral” stance, said the monetary policy statement.
“Although risks of higher inflation have amplified, the MPC felt it would be prudent to wait for greater clarity to emerge. Accordingly, the MPC voted to keep the policy rate unchanged. At the same time, the MPC will continue to remain data-dependent and closely monitor the developments, including supply side pressures getting embedded in the general price level and inflation expectations. The MPC also decided to retain the neutral stance,” it added.
Here’s a look at what it means housing loan and what is the lastest rate of interest offered by different banks.
How repo rates impact home loan rates?
The repo rate is the interest rate at which the central bank lends to commercial banks. Changes to this rate directly influence home loan interest rates.
- When the repo rate rises, borrowing costs for banks increase, causing them to raise loan rates and increase borrowers’ EMIs.
- At the same time, a repo rate cut makes loans cheaper.
Now as the repo rate remain unchanged, the home loan rates offered by different banks also remain the same.
Here’s look at the rates offered by public sector banks:
- State Bank of India: 7.25%
- Punjab National Bank: 7.20%
- Bank of Baroda: 7.20%
- Canara Bank: 7.15%
- Bank of India: 7.10% (lowest)
Here’s look at the rates offered by private sector banks:
- HDFC Bank: 7.75%
- Axis Bank: 8%
- Kotak Mahindra Bank: 7.60%
- IDFC First Bank: 7.75%
- Federal Bank: 7.30% (lowest)
Here’s look at the rates offered by housing finance companies:
- LIC Housing Finance: 7.15% (lowest)
- Bajaj Housing Finance: 7.25%
- PNB Housing Finance: 7.75%
- Aadhar Housing Finance: 8.5%
Lowest home loan rates:
Accordingly, Bank of India, LIC Housing Finance and Canara Bank, are offering lowest home loan rates starting at around 7.1%–7.15% per annum.
All about RBI MPC
RBI last Friday announced a raft of measures to attract foreign capital and support the rupee amid growing risks to growth and inflation from the prolonged West Asia conflict, elevated energy prices and global supply-chain disruptions.
To support the rupee, the measures included scrapping taxes on interest income and capital gains for eligible foreign investors in government securities, offering concessional terms for foreign-currency deposits from non-resident Indians and subsidising hedging costs for select offshore borrowings.
RBI Governor Sanjay Malhotra said India had entered the latest episode of global turbulence with stronger macroeconomic fundamentals than in previous crises, but warned that escalating geopolitical tensions, elevated commodity prices and supply disruptions were clouding the economic outlook.
“The committee noted that the global environment has deteriorated,” he said announcing the policy decision. The panel felt it would be “prudent” to wait for greater clarity to emerge, he added.