Home Loan EMI Jumps After 3 REPO Rate Hike, High Loan Rate New Dilemma For Home Buyers | NewsBust Home Loan EMI Jumps After 3 REPO Rate Hike, High Loan Rate New Dilemma For Home Buyers | NewsBust

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Home Loan EMI Jumps After 3 REPO Rate Hike, High Loan Rate New Dilemma For Home Buyers

By Amit - August 11, 2022

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Loan Amount-EMI(Earlier)-EMI Now-Increase
Rs 1 crore – Rs 74500-83000-8500
Rs 30 lakh -22, 367- Rs 24,906 -2539
Rs 50 lakh Rs 37,278- Rs 41,500 -4222

What to do if you are thinking of buying a flat

Aggarwal says that even if this shock may be there in the short term, if you were thinking of buying a home and you may feel that your EMI will increase due to the continuous increase in the repo rate, but in the long term, it is 5.4 percent today. Has the REPO rate, which has been an average policy interest of 6-8 percent for the last 20 years. In such a situation, if you are thinking of buying a house, then do not change the decision just on the basis of the increase of 1000-1500 EMI.

make long term decisions

When you take a loan, in a span of 20 years we have also seen a fall in EMI and you are seeing an increase, but it will be harmful in the long run. Interest rates are still in the affordable range. Rent is increasing in the last 6 to 8 months. In such a situation, if you are living on rent instead of taking a house, then perhaps the rent would have increased by 1-2 thousand rupees.

House prices still at affordable levels
If we leave out Hyderabad, the houses in other cities are still in the affordable range in metros. In such a situation, if you are looking for a house to live in, then this is still a good opportunity. But if you are buying a property for investment, then there is not such a boom that the property can be sold with a big profit with its price increasing in 1-2 years of booking or purchase. Anyway, with the increase in the demand of houses during Navratri and Deepawali, the rates also increase somewhat, so if you buy a house even within 1-2 months now, then this decision will not be wrong.

Better to stay in house or rent on EMI
It is the dream of people to have a house and if there is such a desire then it is better to take it, but if you are thinking that if I am spending 3-5 percent of my earning on rent then why should I spend 8 percent on EMI, So that math is different. Right now the prices are not increasing at the rate of 5 per cent per annum, but this thing is also an opportunity for those who have not yet been able to buy a house. The prices of the houses are still fair pricing.

How to lighten the EMI burden?
If you cannot bear the burden of higher EMIs now, then you can get the loan tenure extended. Another option is also that if your loan is running from a bank or NBFC, where the interest rates are much higher than others, then you can also opt for loan transfer. There is a competition going on among the banks these days. The third is also that if you have some extra money, then pre pon payment means pay some principal amount ahead of time. This also reduces your EMI burden and loan tenure.

Keep the loan fixed or floating
Floating is better than fixed. Fixed is not better yet. Loan rates fluctuate over a long period of time. If we look at the higher interest rates in the current situation, then floating is better.

If inflation rises, will the EMI increase further?
If the Russia Ukraine War ends, then there can be some relief. In the US too, instead of raising the interest rate three times, the trend is soft. In India, there is a spurt in inflation during festivals. But rather than Diwali-New Year, it will depend more on geopolitical reasons whether the period of increasing interest rates will continue even further.

Did the increase in the rates of iron-steel, cement also make houses expensive?
Aggarwal said that it is true that due to the Russia-Ukraine war and supply chain disruptions, the prices of all types of raw materials related to construction materials have increased sharply in the last few months. It has seen an increase of about 10-15 per cent, a large increase in prices has also been seen in the long period of last 8-10 years. But in the last few years, the effect of laws like demonetisation, RERA and GST has been seen on the real estate sector.

Builders have not been able to increase the rates much in these years. Even in the Kovid period, builders have not been able to recover from the slowdown and sell the unsold inventories that have been stuck for a long time and increase due to stiff competition. They are also competing to eliminate old projects by reducing their margins, so that capital can be raised for new projects. While the replacement value for the builder is increasing.

Amit

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