Just ahead of the festive season, the Reserve Bank of India (RBI) has given a massive gift to home buyers! Today, it decided to cut the repo rate by 0.35 per cent. After this huge cut, the repo rate now stands reduced to 5.40 per cent. This will likely make your home loan EMIs cheaper, provided banks pass teh benefits on to you. Notably, if you have taken a home loan of Rs 30 lakhs for 20 years, then you can get a benefit of over Rs 8,000 in your annual EMI.

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How less will be your EMI 

Those who have taken a home loan of Rs 20 lakh for a period of 20 years at an interest rate of 9.55 per cent, earlier they had to pay a monthly installment of Rs 18,708, but this will now be reduced to Rs 18,253 at the rate 9.20 per cent - if it is passed on entirely. If you were paying an EMI of Rs 28,062 on your home loan of Rs 30 lakh, this will now be reduced to Rs 27,379. On a home loan of Rs 50 lakh, the EMI of 46,770 paid earlier would now be reduced to Rs 45,631. If we take into consideration a loan amout of Rs 80 lakh, the EMI on this will be reduced to Rs 73,010 from Rs 74,832, while on the home loan of Rs 1 crore, now the EMI will be reduced from Rs 93,540 to Rs 91,263.

Notably, the Reserve Bank of India has cut the repo rate 4 times this year.

1. With 0.25% cut in February, repo rate was reduced from 6.5% to 6.25%
2. With 0.25% cut in April, repo rate was reduced to 6% from 6.25% 
3. With 0.25% cut in June, iepo rate was reduced from 6% to 5.75% 
4. In August, repo rate has been reduced from 5.75% to 5.40% after 0.35% cut

What do experts say

According to Anuj Puri, Chairman of Anarock Property Consultants, 0.35 per cent reduction is quite low to increase the demand for mid-segment in the real estate sector. However, affordable housing will get the most benefit from it. Due to other benefits, the demand for affordable housing is increasing, therefore, it will see more demand in coming days. Since prices are low in Tier-2 and Tier-3 cities, spurt in demand may increase.

Builders welcome rate cut 

Manoj Gaur, Chairman of Gaur Sons, said this RBI step will lead to a slight rise in demand in the housing sector. This step will also boost the growth of banking system, which will directly benefit the real estate sector. This step is very good for the affordable housing sector.

According to Dheeraj Jain of Mahagun Group, it is the right time for home buyers to buy a house as the interest rates are now very low. After reduction in the repo rate, all eyes would be on the banks as to how much benefit they extend to home buyers. This RBI move will extend benefit to real estate sector.

Amit Modi, President of CREDAI, Western UP, said that despite repo rate cuts, it has been witnessed that most banks do not extend benefits to home buyers. He said that raeltors are hoping that the banks would extend its benefits to customers so that impact will be seen in the real estate sector.

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Prateek Mittal, executive director of Sushma Group, believes that reducing the repo rate will help in growth of the country's economy. Along with reducing liquidity in the banking system, this move will also affect the resources of banks, which is likely to be beneficial for the real estate sector. The developers will also be able to get a liquidity push with this move.