Home Loan EMIs to Drop by Over ₹1,500 as RBI Slashes Repo Rate to 5.5%
New Delhi | June 7, 2025: Home loan borrowers have reason to rejoice. Following the Reserve Bank of India’s (RBI) decision to cut the repo rate by 50 basis points—from 6% to 5.5%, home loan EMIs are expected to drop significantly.
Also Read: RBI Slashes Repo Rate by 50 bps to 5.5%: EMIs Set to Drop, Real Estate Gets a Boost
For instance, a borrower with a ₹50 lakh home loan over 20 years at an interest rate of 8.5% currently pays an EMI of around ₹43,391. With a 50-basis-point drop in interest, the revised rate becomes 8%, reducing the EMI to approximately ₹41,822. This translates to a monthly saving of ₹1,569, or about ₹18,828 annually.
The repo rate is the rate at which the RBI lends money to commercial banks, and a reduction in this rate enables banks to offer loans to consumers at lower interest rates. Most modern home loans are linked to the Repo-Based Lending Rate (RBLR), making them directly sensitive to such policy rate changes.
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Gaurav Gupta, Secretary of CREDAI, said the move is likely to enhance housing affordability, especially in the mid-income segments. “It also improves sentiment across the real estate ecosystem, benefiting industries such as cement, steel, furnishings, and more,” he noted.
Besides home loans, other types of retail credit — personal loans, auto loans, and education loans — are also likely to see reduced interest rates and lower EMIs.
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The RBI’s decision comes in response to softening inflation, which has now dipped below the central bank’s upper comfort limit, giving it room to stimulate growth through monetary easing.
RBI repo rate cut, Home loan EMI, RBI monetary policy, housing affordability, real estate news, loan interest rates, Gaurav Gupta CREDAI, personal loans, auto loans, RBI rate hike
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