Arun Jaitley:- Government Project To Make Home Loan EMIs Cheaper Than Rents

Finance Minister Arun Jaitley said that the government wants to cut interest rates so that the monthly installment of home loan will be lower than the house rent. Yesterday, the Reserve Bank had cut the repo rate for the second time in two months.
Finance Minister Arun Jaitley said in an interview that the advantage of reducing the repo rate of the RBI will reduce the bank interest rate to the customers. Banks will review their marginal cost of funds based lending rates (MCLR).
MCLR is a policy made by RBI, depending on which bank rate determines the interest rate for the loan. MCLR is calculated based on the cost of marginal cost of funds, periodic premium, operating expenses and the cost of maintaining cash reserve ratio.
Subsequently, the loan is given on the basis of this calculation. Home loans, car loan, etc. Loans are cheaper due to a low rate of MCLR at the base rate. Jaitley said that we have to wait for the decision of the banks and it will be seen sometime later.
Reserve Bank on Thursday announced a 0.25 percent reduction in policy interest rates for the second time during monetary review.
With the reduction of policy interest rate or repo rate to six percent, the cost of borrowing of banks will be less. It is expected that the banks will also extend this relief to the customers.
This can reduce the rate of the loan for the customers and your home loan, auto loan or personal loan can be cheaper. The repo is the interest rate on which banks take loans from the Reserve Bank. Earlier, the RBI had cut the interest rate by 0.25 percent in February.

In his interview, Jaitley said that when Atal Bihari Vajpayee was the Prime Minister, then the home loan had become so cheap that the cost of EMI was lower than that of the house rent. The bank is reluctant to give any benefit to cut the repo rate, the Finance Minister said that they have their own methods. Because of which he can not make any changes immediately, but after some time he will definitely do it. He said that he is happy that the RBI governor said that he will come with a policy of change in consultation with the banks.

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