Home Loan To Be Costly: If you are thinking of buying your dream home by taking a home loan of Rs 75 lakh or more, then taking a home loan can be even more expensive for you. The facility of lower risk weight ratio on home loans above Rs 75 lakh has ended and it has reached 50 per cent of the pre-corona epidemic level. In October 2020, the RBI had reduced the risk weightage to 35 per cent for loan to value of less than 80 per cent. Earlier this offer was till March 31, 2022, which was later extended for one more year till March 31, 2023. But now its term has not been extended further. Let us tell you that the risk weighting ratio was fixed for home loans of different values.
have to pay more out of pocket
Reinstated loan to value of 75 per cent for home loans above Rs 75 lakhs due to non-extension of relaxation given in RBI’s risk weighting which was scrapped during the Corona pandemic Was. This means that home loan borrowers above Rs 75 lakh will have to pay 25 per cent margin upfront amount on their own. Also, due to increase in risk weightage, interest will have to be paid on home loan more by 5 to 10 basis points.
What is loan to value
Any housing finance company or bank gives home loan on the basis of value of the property. If the cost of your flat or house is Rs 50 lakh and the bank has decided to give you a home loan of Rs 40 lakh, it means that the bank has approved a home loan equal to 80% of the cost of the property. It is called loan to value. From April 1, 2023, on home loans up to Rs 30 lakh, if the loan-to-value is 80 per cent or less, then the risk weighting ratio will be 35 per cent, and if the loan-to-value is between 80 and 90 per cent, then the risk weighting will be 50 per cent. For home loans between Rs 30 lakh and Rs 75 lakh, the risk weightage will be 35 per cent if the loan-to-value is up to 80 per cent. For home loans above Rs 75 lakh, the loan to value will be 75 per cent and the rest weighting ratio will be 50 per cent. That is, home loan borrowers of more than 75 lakhs will have to pay 25 percent of the value of the property from their own pocket, which was abolished during the Corona period.
One-third of people took home loans of more than 50 lakhs
According to the data of the National Housing Bank, home loans worth Rs 2.45 lakh crore were disbursed by banks and housing finance companies in 2021-22, more than one-third of home loans were of more than Rs 50 lakh. But now that the interest rates on home loans are increasing. In such a situation, the risk is also increasing with it, that is why RBI has withdrawn the facility of lower interest weighting from loan to value of home loan.
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