Property Advisor Home Loans 05.12.2025

 RBI Saves Repo Rate Unaffected Resulting No Changes in Home Loan EMIs

The Reserve Bank of India has kept the repo rate unaffected for the sixth consecutive time. The repo rate remains the same, i.e., 6.5 per cent which means there will be no changes in the home loan EMIs amount.

The Reserve Bank of India imagines a strong growth of 7 per cent for the Financial Year 2024-25 in the Indian GDP.

RBI Guideline for Home Loans

The Reserve Bank of India (RBI) governs the guidelines for home loan and keeps changing them due to various factors affecting the economy.

 1. Repo Rate

In the 06th consecutive MPC meeting held in the first week of February 2024, the Reserve Bank of India (RBI) announced to keep the repo rate unchanged. The rates were augmented by 25 basis points (bps) in 2023 taking it to 6.5 percent from the earlier 6.25 percent.

 2. LTV (Loan to Value) Ratio

LTV ratio is an assessment of lending risk that all financial institutions, including banks and NBFCs, consider before offering a home loan.

RBI has increased the Loan to Value Ratio up to 90% in case the home loan is below Rs. 30 lakhs. Also, the LTV ratio for loans above Rs. 75 lakhs are up to 75%. Therefore, the higher the LTV value, the easier it would be for an individual to acquisition a property by financing it through a home loan.

Stamp duty and documentation charges will not be included at the time of calculating LTV. Therefore, this reduces the payment of 10% that the home loan borrower is to make upfront.. Also, if the cost of the house is not exceeding Rs. 10 lakhs, banks are allowed to add registration, stamp duty and other documentation charges to the house's cost to calculate the LTV ratio.

 3. Prepayment Charges

A home loan can go up to Rs. 1 crore or even more in some cases, and the maximum tenure goes up to 30 years. RBI has waived off the prepayment charges in case of floating interest rate and has kept the penalty up to 3% in case of a fixed interest rate. Previous, the lenders were asking for a prepayment penalty of up to 5% of the loan amount.

 4. Balance Transfer Facility

Home loan borrowers to refinance their home loan, RBI has waived the foreclosure charges. Home loan borrowers can now easily transfer their current home loan to another bank to avail of a lower interest rate. when the borrower forecloses his home loan from the current bank, he does not have to pay the foreclosure charges.