Learn how much EMI will be reduced on home loan when the repo rate is reduced

RBI Rate Cut: The Reserve Bank of India has reduced the repo rate with 25 basis points (0.25 percent) and made it 6 percent. This is the second time in the year 2025 when the RBI has cut the repo rate. Earlier in February, the repo rate was cut by 25 basis points, which was done for the first time in the last five years. In May, 2020, the bank last reduced the repo rate during the time of Korona epidemic.

What will be the effect of reducing repo rate?

• EMI on loan will be reduced due to reduced repo rate.
• This will increase disposable income, which will increase the expenditure on other goods.
• Liquidity will increase in the market.
• Demand will accelerate (auto, real estate etc.).
• The economy will be encouraged.

How much will the interest rate be reduced?

Home loans, auto loans and personal loans will be benefited from low rate reduction. You will get a loan at a low interest rate. Now let us see how much savings will be made on home loans due to the cut of 25 basis points in the repo rate. Currently, the interest rate on SBI home loan is 8.7 percent. If banks also reduce the interest rate by 0.25 percent, then it will be 8.45 percent.

Savings will be done on home loan

In this way, an EMI of Rs 31,264 has to be paid on the interest of 8.7 percent on the home loan of 25 lakhs. If it is reduced to 8.45 percent, then EMI will also be Rs 30,930. That is, there will be a savings of Rs 334 every month. There will be savings of Rs 4,008 in a year and Rs 40,080 on EMI in 10 years.

Similarly, on a home loan of 50 lakhs, the installment of Rs 62,529 has to be filled every month, due to decrease in the repo rate, it will be Rs 61,859. In this way, every month you will save Rs 670, Rs 8,040 in a year and Rs 80,400 in ten years.

EMI on 1 crore home will now be reduced from Rs 1,25,058 to Rs 1,23,718, if banks also reduce the interest rate by 0.25 %. In this way, there will be a savings of Rs 1,340 in a month, Rs 16,080 in a year and Rs 1,60,800 in 10 years.

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RBI reduced the repo rate amidst the fear of tariffs, EMI from car to home, know what and what effect