Fri. Aug 12th, 2022

NEW DELHI: The increase in the repurchase rate by 1.4 percentage points in the last three months has affected potential home buyers. And it has hit existing ones even harder, as they have limited elbow room to negotiate a better deal.
the runs batted in increased the repurchase rate by 90 basis points (100 bp = 1 percentage point) in two tranches: in May by 40 bp and in June by 50 bp. Many banks have also increased their rates in similar lines.

The repo rate is the rate at which the central bank lends money to banks. For existing borrowers, mortgage loan rates will increase equivalent to the increase in the repurchase rate, since their rates are directly related to it. But the new buyers borrow at the rates set by the banks, adjusting for the rise in the repo rate. The increase in rates on new home loans is lower than…

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