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On Wednesday, April 9 RBI held the MPC meet led by Governor Sanjay Malhotra in which they reduced the repo rate by 25 basis points to 6%. The MPC meet began on March 7 and concluded today, bringing big relief to the middle-class belt. Now if you are planning to take home loan then this reduction in repo rate is beneficial for you as the interest rates on EMO of home loans will be cut, let us explain you how. Sanjay Malhotra led the second monetary policy meeting in his term. In the first Monetary Policy Committee meeting, the repo rate was cut by 25 basis points under his chairmanship. This time, for the second time in a row, they have given a big relief to everyone. For the second time in the last five years, the Reserve Bank has cut down the repo rate. RBI has cut the interest rate by 50 basis points twice. It is expected that after cutting the repo rate, banks can reduce various types of interest rates, including home loans.How Repo Rate is Directed to EMI reduction!The effect of the reduction in the repo rate will be that the interest rate and EMI reduction will be directly beneficial to bank customers. With the repo rate being reduced by 25 basis points again, the repo rate has come down to 6 percent. After this, banks can also reduce the home loan rate by 25 basis points. For example, if your home loan interest rate is 8.5 percent, it will come down to 8.25 percent.Now question is how much will your EMI be reduced in such a situation? In this regards, let us understand the calculation of a home loan of Rs 30 lakh and Rs 50 lakh. This calculation of loan repayment will be done on the basis of 20 years. Let's see how much your EMI will be reduced on a 20-year home loan.What is the benefit on a loan of Rs 30 lakh?If you have taken a home loan of Rs 30 lakh and its interest rate is 8.5 percent, then your EMI will be Rs 26,035. But if this interest rate is reduced by 25 basis points, it will come to 8.25 percent. In this, you will have to pay Rs 25,562 as EMI every month. In this way, you will have to pay Rs 473 less in a month. In this way, you will get a benefit of Rs 5,676 in a year.How much benefit on Rs 50 lakh?If the loan amount increases to Rs 50 lakh and its interest rate is 8.5 percent, then you will have to pay an EMI of Rs 43,391. But if this interest rate is reduced by 25 basis points to 8.25 percent, then you will have to pay an EMI of Rs 42,603 every month. In this way, you will save Rs 788 in one month's EMI. If we look at the annual savings, it will be Rs 9,456.Also Read: RBI Slashes Repo Rate by 25 Basis Points to 6% in Second Consecutive CutWhat is the repo rate?The rate at which RBI lends to banks is called the repo rate. If the repo rate increases, banks get loans from RBI at a higher rate. This increases the interest rates on home loans, car loans, and personal loans, etc., which directly affects your EMI. If the repo rate is reduced, banks can also provide relief to their customers by reducing their loan interest rates.

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