The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.25%.
This decision signals a pause after a series of rate cuts in 2025.
For people with floating-rate home loans, this means EMIs are unlikely to fall further for now.
At the same time, the risk of a sudden increase also appears low.
The decision was taken during the Monetary Policy Committee (MPC) meeting held on February 4, 5, and 6, where members unanimously voted to maintain the current rate.
How RBI Cut Interest Rates in 2025
Throughout 2025, RBI aggressively cut interest rates to support economic growth.
The total reduction was 125 basis points, bringing the repo rate down from 6.50% to 5.25%.
Here’s how the cuts happened:
February 2025: Rate cut by 25 bps to 6.25%
April 2025: Another 25 bps cut to 6.00%
June 2025: A larger 50 bps cut to 5.50%
August & October 2025: Rates remained unchanged
December 2025: Final 25 bps cut to 5.25%
These cuts pushed home loan interest rates to their lowest levels since 2020, easing the burden on borrowers.
Why Home Loan EMIs Fell Quickly
Most home loans today are linked to external benchmarks like EBLR or MCLR.
This helped RBI’s rate cuts reach borrowers faster.
As interest rates dropped, borrowers benefited in two ways:
Lower monthly EMIs, or
Shorter loan tenure, reducing total interest paid
For many households, this relief helped manage rising living costs.
Current Home Loan Interest Rates
As of January 30, 2026, public sector banks continue to offer lower home loan rates compared to private banks.
Public banks are offering rates between 7.15% and 7.30%, while private banks charge around 8% or more.
Some lenders even go up to 9%.
This makes public sector banks more attractive for cost-conscious borrowers.
How Much Money Borrowers Have Saved
The real benefit of lower rates becomes clear when you look at actual loan numbers.
Even a small reduction in interest can save lakhs over time.
On a ₹50 lakh home loan for 20 years, borrowers can save around ₹9.3 lakh in total interest.
On a ₹75 lakh loan, the savings increase to nearly ₹14 lakh over the loan period.
Borrowers can choose to reduce EMIs or keep EMIs unchanged to close the loan faster.
What RBI’s Pause Means Going Forward
By holding rates steady, RBI has indicated that most of the easing is already done.
For borrowers, this means:
EMIs are likely to remain stable
Big rate cuts are unlikely in the near future
Future changes will depend on inflation and economic growth
This could be a good time for existing borrowers to review loan terms, reset tenure, or explore refinancing options.
Final Takeaway
RBI’s decision to pause rate cuts does not take away the benefits borrowers have already received.
After a year of aggressive cuts, home loans are cheaper, EMIs are lighter, and interest costs are lower.
For now, borrowers can enjoy stable EMIs while staying alert to future changes in interest rates.
