On one hand the RBIA repo rate(Repo Rate)50 basis points i.e. 0.50 percent increase in home loans(Home Loan) It is sure to get expensive. After this RBI decision, banks to housing finance companies may make home loans more expensive due to which EMIs are sure to increase. Against this, central government employees(Central Government Employees) There is no need to worry about those expensive loans because under the 7th Pay Commission, the government is giving them the benefit of cheap home loans with the help of which they can fulfill their dream of a home by taking a cheap loan.
Even though RBI is making loans expensive, the central government has reduced the interest rate on housing building advances for its central employees in the financial year 2022-23. The Ministry of Urban Development has reduced the interest rate on Housing Building Advance (HBA) to 7.1 percent for the current financial year. While the interest rate on home loans is going to increase from 8.50 to 9 percent after the increase in RBI’s repo rate.
Housing Building Advance at 7.1%
The central government fixes the interest rate on housing building advances based on the yield (return) of 10-year government bonds. In 2021-22, the interest rate on housing building advances for central employees was 7.9 percent. Now the housing building advance has been reduced to 7.1 percent. Central employees can build their house by taking housing building advance or they can also buy a flat for themselves.
A loan of up to 25 lakh rupees can be taken
According to the recommendations of the 7th Pay Commission and Housing Building Advance 2017 rules, central employees can take 34 months of basic pay or a maximum of Rs 25 lakh as advance for building or buying a house. Housing building advances are available at simple interest rates. As per housing building advance rules, the loan principal has to be repaid in 180 EMIs in the first 15 years. Thereafter, the interest on the loan has to be paid in 60 EMIs over five years. Housing building advance can also be taken. Can repay the loan taken from the bank.
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