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The Reserve Bank of India (RBI) on Wednesday held the benchmark repo rate steady at 5.25 per cent, choosing policy continuity amid global uncertainty and evolving inflation risks. The decision, taken unanimously by the Monetary Policy Committee (MPC) led by Governor Sanjay Malhotra, was largely in line with market expectations.

While the headline decision signals stability, its real impact will be felt by millions of home loan borrowers, prospective buyers and lenders across the country.

Key Rates Stay Put, Stability Continues

With the latest policy decision, the Standing Deposit Facility (SDF) rate remains at 5 per cent, while the Marginal Standing Facility (MSF) and the bank rate continue at 5.5 per cent.

The MPC also retained its ‘neutral’ stance, indicating that future policy moves will depend on incoming data, particularly inflation trends and global developments.

For borrowers, this essentially means one thing, no immediate change in interest rates.

What Happens To Home Loan EMIs Now?

With the repo rate unchanged, banks are unlikely to revise lending rates in the near term. This ensures that equated monthly instalments (EMIs) for most borrowers will remain stable.

According to industry estimates, current home loan rates are hovering around 7.25 per cent to 7.5 per cent per annum. At these levels, the EMI for a 20-year loan works out to roughly Rs 790-810 per month per Rs 1 lakh of borrowing.

This translates to an EMI of approximately Rs 39,500-40,500 for a Rs 50 lakh loan, and around Rs 79,000-81,000 for a Rs 1 crore loan.

A stable interest rate environment allows borrowers to plan finances with greater certainty, without worrying about sudden increases in repayment burden.

Why RBI Chose To Pause

Experts suggest that the central bank’s decision reflects a balancing act between inflation concerns and growth support.

Anshul Jain, Chief Executive, India, SEA, MEA, APAC Office and Retail, Cushman & Wakefield, indicated that heightened global uncertainty, particularly volatility in crude oil prices and supply chain disruptions, likely influenced the RBI’s decision to hold rates. He pointed out that while inflation could face some upward pressure due to energy costs, borrowing rates are already relatively low after earlier easing.

The RBI had reduced rates by about 125 basis points in 2025, and the impact of those cuts is still working its way through the economy.

Relief For Homebuyers And Real Estate Sector

The unchanged rate environment is being seen as a positive for the housing sector.

Rajesh Sharma, Managing Director, Capri Global Capital Limited, said the RBI’s decision reflects a balanced and forward-looking approach that reinforces macroeconomic stability. He highlighted that stable rates will keep EMIs predictable for borrowers and support housing demand and credit growth.

Similarly, Vikas Bhasin, Managing Director, Saya Group, noted that maintaining the status quo provides comfort to both developers and buyers, particularly in a challenging global environment. He added that the move supports continued demand in the real estate sector and reflects the resilience of the Indian economy.

With home loan rates still relatively attractive and property prices largely stable in recent months, the current phase could offer a favourable window for homebuyers.

The unchanged rate environment is being seen as a positive for the housing sector.

Policy continuity supports macroeconomic stability and provides predictability for borrowers, said Sharma. Stable EMIs, he noted, are likely to sustain housing demand and support credit growth.

Similarly, Vikas Bhasin of Saya Group highlighted that the decision offers comfort to both developers and buyers, especially at a time when global uncertainties remain elevated.

With home loan rates still relatively attractive and property prices largely stable in recent months, the current phase could offer a favourable window for homebuyers.

But Risks Remain On The Horizon

While interest rates remain stable for now, there are underlying risks that borrowers should keep in mind.

Rising input costs and supply chain disruptions could push property prices higher in the coming months, potentially increasing the overall cost of home ownership.

At the same time, any sustained rise in crude oil prices could feed into inflation, which may influence future policy decisions.

What Borrowers Should Do Now

Financial experts advise borrowers to use this period of stability to strengthen their financial position.

Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution, highlighted that a stable interest rate environment allows borrowers to plan repayments with greater confidence, without the risk of sudden EMI increases.

He noted that current home loan rates in the range of 7.25 per cent to 7.5 per cent remain relatively affordable, with EMIs broadly manageable across ticket sizes. However, he emphasised the importance of borrowing within one’s means, suggesting that EMIs should ideally remain within 30-40 per cent of monthly income.

Kapoor also advised borrowers to consider longer tenures for better cash flow management, while making periodic prepayments to reduce the overall interest burden. He further recommended maintaining a contingency fund covering six to nine months of expenses and EMIs to safeguard against uncertainties.

For existing borrowers, he suggested reviewing loan terms, exploring balance transfers or renegotiating rates where possible, and increasing EMIs in line with income growth to reduce loan tenure.

However, with global risks still in play, the current stability may not last indefinitely. Borrowers would do well to use this window to plan ahead, manage debt wisely and prepare for potential shifts in the interest rate cycle.