Latest RBI guidelines for home loans
There are several RBI guidelines for home loans that you need to be aware of. There are RBI guidelines for home loan interest rates and other RBI guidelines for home loan eligibility. There are RBI guidelines for home loan prepayment charges as well. In the case of the latter, the RBI has mandated zero pre-payment charges across all banks and NBFCs in case of floating interest home loans.
This ensures easier home loan balance transfer as well. The Reserve Bank of India has also directed that home loan borrowers can get funding up to 90% of the property value in case this value is less than or equal to Rs. 30 lakhs. For loans between Rs. 30-75 lakhs, the LTV (loan-to-value) ratio stands at 80% while it is 75% for loans above Rs. 75 lakhs.
The RBI rules for home loan insurance also stipulate that it is not compulsory for home loan customers to purchase insurance from their lenders. The Reserve Bank of India has also stated that registration charges, stamp duty, and other documentation-linked charges should not be included whenever LTV is being calculated. This lowers the payment of 10% to be made by the borrower upfront. The RBI has also directed that prepayment charges will stand abolished on home loans. Foreclosure charges have also been waived by the RBI. home loans up to Rs. 35 lakh in metro cities will be taken as priority sector loans.
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