Real Estate in Hyderabad is slowly picking up and is trying to get back to the Pre-COVID levels. RBI's decision to hike the repo rate means home loans and other loans are going to get costlier. RBI has hiked the repo rate by 0.40% — the first such hike in nearly four years. The repo rate is the rate at which RBI lends to commercial banks, which means the move will make borrowing expensive for banks.
An increase in repo rate implies that banks will also increase their lending rates making the EMIs costlier. Cheaper Home Loans have prompted home buyers to enthusiastically make purchases that are no longer going to be the case in the future. For Instance, SBI now offers home loans at around 6.85 percent. It will now go up to 7.25%.
For a loan amount of Rs 30 lakh and tenure of 20 years, the monthly EMI now is about Rs 22,990 per month. The total interest payable for 20 years will be about Rs 25,17,510 and the total payments made over the loan term will be Rs 55,17,510.
At the new interest rate of 7.25 percent, the EMI will rise to Rs 23,711 per month, an increase of Rs 721 over the old EMI of Rs 22,990. The total interest outgo will be about Rs 26,90,707, higher by Rs 1,73,197 over the old rate. The total payment to be made will be Rs 56,90,707. Real estate is skeptical about this hike damaging the prospects in near future.