No rate cut,but a few tweaks may see home loans cost less

Home Loansrate cut-home loan

Housing loan borrowers may soon see a drop in their EMIs. The Reserve Bank on Wednesday lowered risk-weight provisions for home loans beginning now, which is expected to push lending institutions to cut home loan rates.

The regulator also reduced the standard asset provisioning on such loans. The RBI said it had decided to keep lower risk weights on certain categories of home loans in light of the healthy performance of the home-loan portfolio and low delinquencies. Loan Calculator for calculating EMI

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Provisions for standard assets have been reduced by 15 basis points to 0.25% from 0.40%.

“Considering the importance of the housing sector and given its forward and backwards linkages to the economy, RBI has decided, as a counter-cyclical measure, to reduce the risk weight on certain categories of housing loans sanctioned on and after today,” RBI said in a circular. For loans above Rs 75 lakh with LTV (loan-to-value) ratio of above 75 percent, risk weight has been reduced by 25 per  …

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