Reserve Bank of India Keeps Repo Rate Unchanged at 5.25%
The Reserve Bank of India (RBI) has maintained the repo rate at 5.25% for the fourth consecutive Monetary Policy Committee (MPC) meeting, offering relief to millions of home loan borrowers whose loans are linked to floating interest rates.
Borrowers Continue to Benefit
The repo rate decision means there will be no immediate increase in EMIs, allowing borrowers to continue benefiting from the cumulative 125 basis points of rate cuts delivered during 2025.
According to Adhil Shetty, CEO of BankBazaar, the current rate pause means borrowers continue to enjoy the benefits of the previous rate cuts.
- A ₹50 lakh home loan with a 20-year tenure saves around ₹3,050 per month compared to earlier rates.
- A ₹75 lakh loan translates into savings of nearly ₹5,800 per month.
Stable Rates a Boost for Real Estate Sector
The RBI's decision is expected to support housing demand, particularly in the affordable and mid-income segments.
- The decision is positive for the real estate sector as home loans have become significantly more affordable following the rate cuts implemented in 2025.
- The current rate environment presents an opportunity for buyers to enter the market before property prices move higher.
Stability in Uncertain Times
Sandeep Ahuja, Global CEO of Atmosphere Living, said the RBI's move comes at a time of continued global economic uncertainty and offers much-needed stability.
- The RBI's decision to keep rates unchanged at 5.25% is a sensible move in the current environment.
- Home purchase decisions are increasingly being driven by lifestyle aspirations and long-term needs rather than short-term interest rate movements.
Next Phase of Housing Demand
Dr Niranjan Hiranandani, Chairman, NAREDCO, said the RBI's decision should be viewed as a sign of policy stability rather than a pause in growth.
- The RBI's decision to maintain the repo rate at 5.25% should be viewed as a signal of stability rather than a pause in growth.
- The real estate sector has already benefited from the cumulative rate reductions since early 2025; what the market needs now is visibility and predictability.
Risks of Rising Rates
While the current scenario remains favourable, inflation risks remain a concern.
- Rising fuel and energy prices, higher import costs due to rupee weakness, and geopolitical tensions in West Asia have increased inflationary pressures.
- India's inflation rate has already moved up from 2.74% in January to 3.48% in April, with expectations of further increases.
For now, however, home loan borrowers can continue to enjoy stable borrowing costs, while prospective homebuyers benefit from one of the most affordable home financing environments seen in recent years.