Good news for homebuyers! The Reserve Bank of India (RBI) has reduced the repo rate again.
On April 9, RBI Governor Sanjay Malhotra announced a 0.25% (25 basis points) cut, bringing the repo rate down to 6%.
This is the second time in 2025 that the repo rate has been lowered. The first cut was in February, when it dropped from 6.5% to 6.25%.
How This Affects Home and Car Loans
When the RBI reduces the repo rate, banks usually follow by lowering their loan interest rates.
This is great for people with floating-rate home loans, as their EMIs (monthly payments) may go down. New homebuyers can also get loans at cheaper rates.
Car buyers can benefit too. With lower loan rates, EMIs become more affordable, making it easier to buy a better car.
Currently, home loan interest rates are between 8.10% and 9.5%, and these are expected to drop after the April 9 announcement.
RBI’s Policy Announcement
Governor Sanjay Malhotra presented the RBI’s monetary policy on April 9 at 10 a.m. After a three-day meeting, the Monetary Policy Committee (MPC) decided to cut the repo rate by 0.25%.
This is the first policy update for the financial year 2025–26 and the second for the calendar year.
What Should You Do?
If you’re planning to take a home or car loan, now is a good time. With two repo rate cuts this year, banks are expected to reduce interest rates soon.
However, these changes might take a few weeks to reflect. It’s smart to wait a bit and then negotiate better loan terms with your bank.
See How Much You Can Save
Here’s an example:
If you take a ₹50 lakh home loan for 20 years at 8.5% interest, your EMI will be ₹43,391. Over the full term, you’d pay ₹54.14 lakh in interest.
But with the new 0.25% rate cut, your total interest would drop to ₹48.9 lakh — a saving of ₹5.24 lakh!
Alternatively, if you keep the EMI the same, your loan could finish about 12 months earlier.
