Home buyers can now avail 90% loan for a property up to Rs 30 lakh

Home buyers now have all reasons to be ecstatic with Reserve Bank of India (RBI) recent guidelines. After reducing the repo rates by 50 basis points which are a signal to decrease in home loan interest rate, RBI has yet again issued other exciting norms. According to the new guideline, the loan to value for home loans for a property of Rs 30 lakh, has been increased up to 90% along with reducing the risk weights for home loans. In layman’s language home buyers can now get 90% home loans for properties ranging up to Rs 30 lakh. The apex body also stated that the loans for above Rs 30 lakh or up to Rs 75 lakh shall be up to 80%. And for above Rs 75 lakh, the home loan shall be up to a maximum of 75%.

In case of the reduction of risk weights, the new guideline states that the risk weights shall be 50% for a loan up to Rs 30 lakh, wherein the home buyer can avail up to 90% of the loan for the property value. Whereas, in such cases where the buyer avail loan up to 80% of the property value, the risk weight shall be 35%.

However, earlier, 90% home loans were available for properties up to Rs 20 lakh. This step has brought a great relief to the home buyers who seek to buy low-cost housing. And this step has been also considered to boost the low-cost housing and will be a great push to honorable PM Narendra Modi’s much talked about initiative ‘Housing for all’.  In addition, banks are also expected to be benefited with this move as they have been struggling for capital.