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How will the repo rate affect home loans?

April 26, 2017affect home loans rate repo

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How will the repo rate affect home loans?

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Say the repo rate is 6% then the banks may keep a margin of 4% and grant home loans at 10%. If the central bank opts to reduce the repo rate by 2% then the banks would have to pass on this benefit to the end customer. Hence the home loans would be available to the public at 8%.