RBI's repo rate cut: Impact on home loan EMIs
The Reserve Bank of India (RBI) just dropped the repo rate by 0.5%, bringing it down to 5.5%. With a total cut of 1% since February 2025, this move is meant to make home loans lighter on your wallet and give a boost to real estate. Here's what this actually means for anyone with—or thinking about—a home loan.
How the repo rate affects your home loan
Home loans linked to the Repo Linked Lending Rate (RLLR) change their interest rates whenever the RBI tweaks its repo rate. This setup passes on benefits faster than older MCLR-based loans, so you could see your EMIs drop pretty quickly after a rate cut.
Impact of the latest cut on a ₹40 lakh loan
If you've got a ₹40 lakh home loan at 8.5% interest, this latest cut could lower your EMI by around ₹1,255 each month if your new rate drops to 8%. Thinking of switching to an RLLR loan? It usually just takes a small fee—but remember, rates can go up as well as down, so weigh the risks before making the jump.