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Home Loan EMIs Decrease, Boosting Affordability as RBI Reduces Repo Rate

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In a significant move to alleviate the financial strain on home loan borrowers, the Reserve Bank of India (RBI) has cut the repo rate by 50 basis points to 5.5%, marking the third consecutive reduction in 2025. With an overall reduction of 100 basis points this year, this latest change is expected to lower equated monthly instalments (EMIs) and improve home loan affordability, especially for those with floating-rate loans.

The central bank has also reduced the Cash Reserve Ratio (CRR) by 100 basis points, a strategy aimed at enhancing liquidity and encouraging banks to lend more actively. This measure is intended to support both homebuyers and real estate developers by providing easier access to capital for project completions.

As banks adjust their lending rates in line with the new repo rate, home loan borrowers can expect lower EMIs. For example, the EMI on a ₹50 lakh loan over 20 years could decrease by approximately ₹3,164 per month. Similarly, monthly savings could amount to around ₹6,329 for a ₹1 crore loan and ₹9,493 for a ₹1.5 crore loan.

This rate reduction is especially beneficial for borrowers with repo-linked loans, as they typically see immediate adjustments following changes in the policy rate. However, the benefits may not be realized uniformly across all borrowers. Approximately half of floating-rate loans from public sector banks are tied to the repo rate, while many borrowers are still linked to the older Marginal Cost of Funds-Based Lending Rate (MCLR) or base rate systems, which may experience slower transmission of rate cuts.

Given the current trend of declining market rates, those with loans at considerably higher rates might explore refinancing options to lower their interest payments. This is particularly relevant for loans linked to MCLR or base rates, as transitioning to a repo-linked loan could yield significant savings. Additionally, borrowers with strong credit profiles may find more competitive lending terms available in the current market.

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These interest rate reductions are expected to stimulate housing demand, particularly in the mid-income and premium segments, as improved affordability boosts buyer sentiment. Industry experts anticipate an uptick in property purchases in the upcoming quarters, further energizing the residential real estate sector.

As banks start adjusting their lending rates in response to the RBI’s actions, borrowers are encouraged to stay informed and consider financial strategies that take advantage of the current low-interest rate landscape.

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RBI Ends Special Dollar-Rupee Swap Window Early Amid Strong Demand

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Mumbai: The Reserve Bank of India (RBI) has decided to close its special forex swap facility for fresh FCNR deposits early.

The facility will now close on August 31, the RBI said on Friday.

The central bank said the decision was taken after receiving an encouraging response. The facility has attracted $52.3 billion through fresh foreign currency deposits.

Banks can continue to undertake swaps with the RBI against FCNR deposits raised under the facility until September 11.

Meanwhile, the schemes for External Commercial Borrowings and Overseas Foreign Currency Borrowings will remain open until December 31, 2026.

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The RBI launched the special US dollar-rupee forex swap facility on June 8. It allowed banks to raise fresh three-to-five-year FCNR deposits.

Banks could then swap these deposits with the RBI at a concessional rate. The facility effectively covered the entire hedging cost for banks.

The strong response to the scheme led the RBI to bring the facility to an early close.

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Leksa Lighting Technologies Named among India’s Top 100 MSMEs

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Moodbidri: A dream that began in the rural area of Niddodi in Moodbidri has now gained national recognition. Leksa Lighting Technologies Pvt. Ltd., founded by Ronald Sylvan D’Souza, has been recognised as one of India’s Top 100 MSME companies.

The prestigious national recognition was presented by the MSME Udyog Foundation at a ceremony held in New Delhi on August 8, 2026.

Ronald Sylvan D’Souza started his entrepreneurial journey from a humble background. Through hard work, discipline and continuous efforts, he built Leksa Lighting Technologies into a recognised lighting technology company.

The company has focused on quality, technological innovation and indigenous manufacturing. Research and development have also played an important role in its growth.

Leksa Lighting has adopted Japanese work practices to improve its manufacturing and operational standards. The company has also worked towards developing quality lighting solutions in India.

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What began as a dream in rural Karnataka has now reached different parts of the country. The company is also making its presence felt in international markets.

Speaking about the recognition, Ronald Sylvan D’Souza said the award was not an individual achievement. He credited the entire Leksa team, customers, business partners, family members and everyone who supported the company.

He said he was proud and happy to see a dream that began in Niddodi and Moodbidri receive recognition at the national level.

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The achievement highlights the potential of rural entrepreneurs. It also shows that determination, discipline and consistent hard work can help a business from a rural area achieve success on a national platform.

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Leksa Lighting Technologies’ journey stands as an example of how a local dream can grow into a nationally recognised enterprise.

 

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Vehicle Prices to Increase from August 1

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New Delhi: Buying a new vehicle is set to become more expensive from August 1, adding to the financial burden on consumers. Several automobile manufacturers have announced a price hike due to rising production costs.

The increase is mainly driven by higher prices of raw materials and components. The cost of steel, aluminium, rubber, plastic, electronic chips, batteries, and spare parts has gone up in recent months. Global market changes caused by ongoing conflicts and inflation have also increased manufacturing expenses.

As a result, vehicle companies have decided to raise the prices of new models. Customers planning to purchase a new vehicle are likely to pay more from August 1.

The price hike is also expected to affect the travel and transport industry. Travel agencies and tour operators say buying new cars, SUVs, and other passenger vehicles will become more expensive.

Operators have already been facing higher expenses due to increased fuel prices and toll charges. With the additional cost of new vehicles, many travel agencies are preparing to revise their rental charges.

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The Karnataka Travels Association has indicated that travel fares may be increased to manage the rising operating costs. Passengers may have to pay more for each trip if the revised rates are implemented.

Meanwhile, several automobile manufacturers have already published details of the upcoming price increase on their official websites. Consumers planning to buy a new vehicle may consider making their purchase before the revised prices come into effect on August 1.

 

 

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