RBI Keeps Repo Rates Unchanged, What Does This Mean For Your Home Loans And EMIs? EXPLAINED

The Reserve Bank of India’s Monetary Policy Committee (RBI-MPC) on Wednesday, August 6, maintained the key repo rate at 5.5 per cent, offering a measure of relief for borrowers. This decision, coming after cumulative cuts of 100 basis points since February, means that there will be no immediate rise in monthly home loan instalments (EMIs).

In the previous MPC meeting, the central bank had reduced the repo rate by 50 basis points. Home loan interest rates, which have already fallen to as low as 7.3 per cent at top banks including SBI, HDFC Bank, ICICI Bank, Canara Bank, and Bank of Baroda, are likely to remain stable in the near term.

How Will MPC's Rate Pause Impact Your EMIs?

For home loan customers, the current pause in rate changes offers stability in borrowing costs, which could continue to support housing demand, particularly in urban markets and among first-time buyers.

As inflation moderates and the policy stance remains neutral, experts suggest that the lending environment will stay supportive unless external shocks emerge in the coming months.

Santosh Agarwal, CFO & Executive Director, Alpha Corp Development Limited, remarked, “Stable borrowing costs will improve homebuyer affordability by keeping EMIs under control and allow developers to optimise capital for large-scale and ongoing projects. This monetary stability is expected to accelerate purchase decisions in price-sensitive segments, enhance liquidity, and strengthen market sentiment. We foresee this move supporting sustained demand across both residential and commercial real estate, driving long-term growth and reinforcing the sector’s overall stability.”

Ashish Sharma, AVP Operations, Brahma Group, echoed the sentiment and added that the panel's rate pause will help boost buyer confidence and also make price-sensitive markets in real estate more active. 

Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank, added, “With adequate liquidity in the system and rates now more conducive, we anticipate stronger credit demand, particularly in MSMEs, affordable housing, and rural lending.”

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Sentiment Among Homebuyers Likely To Stay Strong

Industry stakeholders welcomed the RBI’s pause, emphasising its positive implications for housing demand and buyer affordability. Prashant Sharma, President of NAREDCO Maharashtra, said, “The RBI’s decision to maintain the repo rate at 5.5 per cent despite easing inflation reflects a cautious yet balanced approach to managing global headwinds and domestic stability. For the real estate sector, a status quo on rates ensures continued momentum in homebuyer sentiment and sustains the affordability factor in housing.”

Shishir Baijal, Chairman and Managing Director of Knight Frank India, noted that a stable rate environment and surplus liquidity would continue supporting demand, especially in the mid- and low-income housing segments.

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