We have noticed a direct impact of Reserve Bank of India’s monetary policy announced in October. Our phones haven’t stopped buzzing, ever since. Sun Elecasa, one of the best apartments near Lulu Mall Trivandrum, has been receiving numerous enquiries lately. The sudden surge must be a result of the new policy, which kept the repo rate and reverse repo rate unchanged.

That resulted in Indian banks bringing down home loan rates so low that Oruvathilkottah, a prime location near NH66, started to look pocket-friendly. Suddenly many decided that 2021 is a good year to own a luxury apartment.

We are sure that the decision by RBI’s Monetary Policy Committee to continue its accommodative stance was the nudge many were waiting for. Already having an edge with competitive pricing, Sun Elecasa’s sky-villa-inspired design has become more accessible to many more potential home owners now. Young people have been visiting sample apartments, thanks to the reduced home loan rates. Realty industry experts hope that this trend in home loans will continue for some more months. This is an explainer on what the RBI policy means for someone eager to be a homeowner.


It was for the eighth time that RBI decided to go ahead with a low repo rate. It was maintained at 4 per cent and the reverse repo rate is still 3.5 per cent. Repo, or Repurchase Option, as we know, is the rate of interest that the central bank of India charges on cash borrowed by banks after selling securities like gold or treasury bills to the RBI.

RBI keeps a tight rein on inflation and cash flow in the country by controlling the repo rate. The lower it is, the more a bank’s ability to offer cash for retail loans. This will lead to an increased supply of money in the economy. This is particularly good for economic growth rate.


Despite being competitively priced, many perceived Sun Elecasa to be beyond their means, because of the location. But this month, ever since the country’s banks announced festive discounts on their home loan rates, we’ve received a deluge of enquiries. Many realise that it is no longer so difficult for them to own a 3BHK, just a kilometre away from what is being called India’s biggest shopping mall. They gathered that luxury and location now comes at a discount.

So, here’s what led to this frightfully splendid situation for potential home owners. Leaning on the low repo rate, major nationalised banks have announced massive discounts on their home loan rates. During this period, every year, consumers make major buys and it is not unusual for banks to come out with festive offers. What is unusual is that this year the rates have hit a historic low.

The biggest lender in the country, SBI, announced a 6.7 per cent rate on credit-score-linked home loans in October, irrespective of the amount that’s being borrowed. This has never happened before.

Here’s a comparison of SBI home loan rates of previous years. In 2020, the festival offer rate was 6.9 per cent for loans below Rs 30 lakhs and 7 per cent for loan amounts above that. SBI would usually offer an interest rate of 7.15 per cent when a loan above Rs 75 lakhs is availed. Other top lenders like ICICI Bank, Punjab National Bank (PNB), Kotak Mahindra, Bank of Baroda (BoB) and Yes Bank have also announced discounts, that has already pushed for greater sales in residential real estate. The rate was as low as 6.5 per cent, in some cases.


Festive offers on home loan rates from mortgage lenders have never been this favourable to the potential home buyer. Financial analysts feel that this trend is going to stay throughout this year.

Of course, it would be ideal to book a home before the offers end. But according to analysts, even if these magnificent offers end, it is likely that home loan rates won’t rise beyond a point. They say this based on RBI’s monetary policies in this year.

To begin with, the central bank decided to continue with its accommodative policy. Usually, when the repo rate is maintained at a low rate, banks also bring down home loan rates. The accessibility of home loans makes sure that more consumers can borrow retail loans. This will help stabilize inflation.

Now, if one carefully follows the words of RBI governor Shaktikanta Das while announcing the monetary policy, one can notice there is an emphasis on growth. He says the six-member Monetary Policy Committee decided to continue the low repo rate to sustain growth and mitigate the impact of Covid crisis. He maintained that India was on its way to achieve a GDP of 9.5 per cent in the current fiscal year of 2021-22. We have to remember that this is despite the wide and varied challenges including inflation lashing at Indian economy.

More home buyers would have a direct impact on the economy. So, there is a good chance that RBI will not steer away from its accommodative monetary policy this year.


Mortgage lenders have been witnessing a greater demand for home loans. Even those who hesitated earlier to buy flats in this prime location are now entertaining the possibility.

This drive-in big-ticket loans like home loans will not only help the real estate industry, but the overall economy. RBI, in a bulletin published a couple of weeks after announcing its low repo rate, said that the country’s economic recovery has been happening gradually. The bulletin stated that various indicators of growth showed a positive sign. Among the growth indicators was the rise in demand for high-value items like real estate. Who would have thought that simply owning an apartment near Lulu Mall would improve the financial health of the country?

Those of you interested in reading the policy and the bulletin can find it here:

If you want to prebook a visit to Sun Elecasa, contact us. Contact details can be accessed here:

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