Rate cut to new home loans to be passed on automatically
You might remember the blog that we did recently about Repo rate cut . We had warned you, our consumers that its better to make sure that your loan is linked to an index which when the rate cut happens the savings will get passed to you automatically
We are now pleased to announce that our central government is making it mandatory for all banks which issue new floating rate home, auto, personal advances and business loans to be linked to one of three external benchmarks like repo rate instead of to MCLR. The three benchmark indexes are RBI’s repo rate, three-month or six-month treasury bill yields or any benchmark provided by FBIL. This policy will be effective from Oct 2019. The primary advantage of this move is unlike MCLR which takes 4 to 6 month for a rate cut to take effect it will happen immediately. The banks have also been asked to reset the interest rate under external benchmark at least once in three months.
The government has announced a slew of measures like liquidity support to the NBFC sector to further push credit disbursal. The State Bank of India had become the first bank to link its certain loans to repo. Later, a host of other banks too started linking their loan products to repo or other external benchmarks.
If you are planning to take a home loan, wait out until Oct and get a loan that is linked to an index which will pass the rate cut benefits to you. Also its good if the external benchmark index is not highly volatite. Find out your best options among public and private sector banks.
RR Housing is a leading construction and real estate company in Coimbatore providing quality design and construction with fully vaastu complaint gated community flats and row houses for the last 30 years. Delivered over 20 lakhs square feet of construct area to more then 1000 happy families.
Call our RR Office to find out the best interest rates.
sales@rrhousing.net
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