Home loans over Rs 75 lakh to get cheaper

MUMBAI: High quality home loans with borrowing over Rs 75 lakhs are likely to get cheaper with the Reserve Bank of India, making it easier for banks to lend in this segment. Previously, banks had to provide higher capital for larger loans, which resulted in them now charging higher interest rates for this segment, as the differentiation could be streamlined by eliminating interest rates.
“Recognizing the importance of the real estate sector to economic recovery, given its role in job creation and interdependence, it was decided as a countercyclical measure to streamline risk weights by pegging them with credit to credit only. Value quotas for all new home purchase loans approved by March 31, 2022, ”said a statement from RBI. When making the announcement in the policy, RBI Governor Shaktikanta Das said this was part of RBI’s development efforts.

Under the new regulatory regime, home loans above Rs 75 lakh will have a 35% risk weight versus 50% earlier. The higher the risk weight on a loan, the greater the capital that lenders will have to put aside. Home loans have a relatively lower risk weight compared to corporate or other personal loans (excluding gold loans).
The current mortgage lending obligation remains, which means that the borrower must bring in 25% of the loan value for high-quality houses and 20% for houses under 80 lakh.
Consider RBI makes home loans cheaper over Rs 75 lakh

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