Home loans to get cheaper as RBI slashes risk weight

Home loans may get cheaper with bankers on Wednesday indicating that interest rate on such loans will come down following reduction of risk weights by the RBI. The decision to reduce the risk weights for home loans over Rs 30 lakh category will release capital for the banking industry and is a positive move, SBI chief Arundhati Bhattacharya said in a statement.

The risk weight for individual housing loans above Rs 75 lakh has been reduced to 50 per cent from the earlier 75 per cent, while for loans between Rs 30 and Rs 75 lakh, a single Loan to Value (LTV) ratio slab of up to 80 per cent has been introduced with a risk weight of 35 per cent.