The Reserve Bank of India (RBI) is set to hold its next monetary policy meeting from February 4 to 6, 2026.
Experts predict a possible 0.25% cut in the repo rate as the economy reaches a crucial stage.
The RBI faces a delicate task: balancing inflation control with economic growth. Currently, the central bank is focusing on increasing liquidity in the market.
A reduction in the repo rate to 5.25% could encourage consumer spending and investment.
Home Loan Borrowers Could Save Big
A cut in the repo rate directly impacts home loans. For example:
A 20-year loan of ₹50 lakh at 9% interest could see monthly savings of around ₹800 if the repo rate falls by 0.25%.
The interest rate would drop to 8.75%, saving a total of ₹1.9 lakh over the loan tenure.
Borrowers could either reduce their EMI or keep it the same to shorten the loan term by 10–12 months, resulting in total savings of over ₹4 lakh.
This makes it a good opportunity for home loan holders to review their repayment plans.
Experts Warn: Inflation Could Keep Rates Steady
Not everyone expects a rate cut. Rating agency Crisil pointed out that rising inflation may force the RBI to keep interest rates unchanged in the upcoming meeting.
They stated, “Given the rise in inflation, we expect the RBI to keep policy rates unchanged for the time being.”
Repo Rate Changes in 2025
For context, the Monetary Policy Committee (MPC) reduced the repo rate by a total of 125 basis points in 2025:
February: 25 bps
April: 25 bps
June: 50 bps
December: 25 bps
The rate remained unchanged in August and October.
This history shows that the RBI has been gradually easing rates while monitoring inflation carefully.
