Home loans to become cheaper, thanks to RBI’s latest move
On Friday the Reserve Bank of India said that it will rationalise the risk weights and link them to Loan-to-Value (LTV) ratios for new housing loans sanctioned up to March 31, 2022. RBI did this to make home loans cheaper. The central bank further passed a statement that “Recognizing the criticality of real estate sector in the economic recovery, given its role in employment generation and the inter-linkages with other industries, it has been decided, as a countercyclical measure, to rationalise the risk weights by linking them only with LTV ratios for all new housing loans sanctioned up to 31 March 2022.”
It is also said by some useful resources that the rationalizing risk weightage on home loans and linking it to Loan to Value (LTV) ratio will effectively result in higher credit flow to the real estate sector. It is positive news for the sector.
“This move by the central bank addresses the urgency required to boost the real estate sector in the country. Now Home loans will be easily accessible and competitive for the customers,” said Hardayal Prasad, MD & CEO, PNB Housing Finance.
