There is relief for pre-April 2016 borrowers whose home loans rates have not been revised by banks in line with market rates. The Reserve Bank of India has directed banks to link older home loan rates to the current market-linked benchmark.
Prior to April 2016, home loans were linked to the base rate which was arbitrarily decided by banks. As there were complaints that the base rate was not reflecting rate cuts, the RBI introduced the formula-based marginal cost of lending rate (MCLR) which was linked to the cost of funds. While borrowers after April 2016 got the benefit of MCLR, those with older loans continued to pay as per the base
There is relief for pre-April 2016 borrowers whose home loans rates have not been revised by banks in line with market rates. The Reserve Bank of India has directed banks to link older home loan rates to the current market-linked benchmark.
Prior to April 2016, home loans were linked to the base rate which was arbitrarily decided by banks. As there were complaints that the base rate was not reflecting rate cuts, the RBI introduced the formula-based marginal cost of lending rate (MCLR) which was linked to the cost of funds. While borrowers after April 2016 got the benefit of MCLR, those with older loans continued to pay as per the base
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