Latest RBI Guidelines for Home Loan That You Should to Know

Money in bank in 24 hours

Apply now

Latest RBI Guidelines for Home Loan That You Should to Know

  • 2 min read

  • Highlights

  • RBI guidelines are designed to make home loans

  • Based on it, you can refinance your home loan at lower interest rates and a tenor

  • RBI has abolished prepayment charges for borrowers


When you’re taking a loan of any kind, it is important to be aware of the guidelines that govern it. Familiarising yourself with RBI’s guidelines for a home loan ensure that your lender is keeping true to government policies and not overcharging you.

Loan to value ratio

According to the latest reports, the Reserve Bank of India has set new guidelines for Home Loans. To encourage home loans and make them more affordable, RBI has increased the LTV (Loan to value ratio) to 90% for home loans below Rs.30 lakhs. This means that lenders may fund over 90% of your home value. On the other hand, loans over Rs.75 lakh have an LTV ratio of over 75%. So, this percentage of your loan can be financed via a home loan. A higher LTV makes it easier for you to purchase property via a home loan.

RBI further states that stamp duty, registration charges and other documentation charges should not be included while calculating LTV. This decreases the 10% payment that the borrower has to make upfront.

Prepayment charges

RBI guidelines for  home loan prepayment  charges are also very important. RBI has abolished prepayment charges to encourage borrowers to pay off the loan in case of an increase in their income. This can help you reduce your tenor and your EMIs, which is very beneficial.

Home Loan EMI Calculator | Bajaj Finserv

Home loan takeover and foreclosure

RBI has set guidelines for home loan takeover as well, so you refinance your home loan at lower interest rates and a tenor that suits you. RBI has also waived off foreclosure charges, further adding to the benefits that you can accrue.

Here is an infographic that explains the mandatory RBI guidelines and will help you choose the right Home Loan.

Additional Read:
6 Easy Tips to Get Your Home Loan Approved Instantly
How the RBI’s rate hike is likely to affect your loans

DISCLAIMER:
The information, products, and services included in or available on bajajfinserv.in may include inaccuracies or typographical errors. Changes are periodically added to the information herein. bajajfinserv.in and/or its respective suppliers / affiliates may make improvements and/or changes on the bajajfinserv.in website at any time.
The material contained in this site and on associated web pages is general information and it is not intended to be advice on any particular matter. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. The decision with respect to any financial product or opportunity or nature or suitability or choice or the viability of any product or service shall always be sole responsibility and decision of the subscriber and user.
Apply for Home Loan
Home Loan

 
 
 

Dos and Donts of Investing in Property for Great Returns

PRODUCT GUIDANCE

Dos And Don'ts Of Investing In Property For Great Returns

PRODUCT GUIDANCE

When should you do a home loan balance transfer?

PRODUCT GUIDANCE

Your easy guide to choosing the perfect property to invest in

How would you rate this article

 Please let us know why?

What did you dislike?

What did you dislike?

What did you like?

What did you like?

What did you like?

Next up

PRODUCT GUIDANCE

How to get your home loan quicker with Bajaj Finserv

Subscribe Now

Subscribe Now

Subscribe to our monthly newsletter and get the latest updates

Thank you for subscribing