The Reserve Bank of India’s Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 5.25 percent. After several rate cuts over the past year, the RBI has now chosen to pause.
This decision was expected because inflation is within the RBI’s target range and economic growth indicators remain strong. Therefore, no change in interest rates was anticipated.
Impact on Home Loan Borrowers
For home loan borrowers, this means there will be no immediate change in EMIs or lending rates, especially for loans linked to external benchmarks like the repo rate.
Banks are unlikely to change home loan interest rates unless there is a policy shift or a change in liquidity conditions. So, borrowers should not expect any sudden increase or decrease in their loan rates.
Although there is no new relief today, home loan borrowers have already gained a lot from earlier rate cuts.
The RBI has reduced the repo rate by 125 basis points, which has helped lower EMIs and reduce total interest payments over the loan period.
How Much Have Borrowers Saved?
According to recent data, a person who took a home loan of ₹50 lakh for 20 years has saved more than ₹9.29 lakh in total interest due to the rate cuts so far.
Their monthly EMI has also reduced by around ₹3,900, showing the significant benefit of previous repo rate reductions.
What Happens Next?
Since the RBI has kept interest rates unchanged, floating-rate home loan EMIs are expected to remain stable in the coming months.
Fixed-rate borrowers will not be directly affected unless they choose to refinance or switch lenders. Experts say the RBI is now focusing on ensuring that borrowers fully benefit from earlier rate cuts instead of rushing into new rate reductions.
People planning to take new home loans may not see further rate cuts immediately.
Future Outlook for Home Loan Rates
In the future, any change in home loan interest rates will depend on factors such as inflation, global interest rate trends, and the RBI’s assessment of domestic economic growth.
For now, borrowers can expect stability rather than new relief, while continuing to benefit from earlier rate cuts already reflected in their loans.
