RBI holds repo rate: Home loan EMIs stay stable, borrowers save up to ₹13.9 lakh

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.25% following the conclusion of its three-day Monetary Policy Committee (MPC) meeting on April 8, 2026, offering near-term relief to home loan borrowers—particularly those with repo rate-linked loans.

The decision to maintain status quo comes at a time of heightened global uncertainty, with RBI Governor Sanjay Malhotra flagging emerging inflation risks linked to geopolitical tensions. He noted that the ongoing West Asia conflict, especially between Israel and Iran, could disrupt supply chains and weigh on economic growth. The central bank has projected CPI inflation for FY27 at 4.6%, indicating a cautious outlook on price stability.

For borrowers, the immediate implication is clear: lending rates linked to the repo rate are unlikely to rise in the short term. This ensures that the benefits of earlier rate cuts continue to flow through to EMIs, preserving affordability for both existing and new home loan customers.

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Adhil Shetty, CEO, BankBazaar, said: "The RBI has held the repo rate at 5.25% for the second consecutive meeting, but the context this time is meaningfully different. This is not a routine pause. The MPC has flagged a supply shock driven by the West Asia conflict, with crude oil surging well above its own planning assumptions. The unanimous decision to hold reflects a deliberate choice to wait and watch before acting in either direction. Home loan borrowers on repo-linked products are already seeing the benefit of the 125 basis points delivered since early 2025."

He added: "On a ₹50 lakh, 20-year loan, that translates to an EMI saving of around ₹3,050 per month and a lifetime interest saving of ₹7.34 lakh. On a ₹75 lakh loan, the monthly saving is approximately ₹5,800, with total interest savings of ₹13.94 lakh. A rate hold keeps these gains intact. Borrowers still on MCLR-linked products are not seeing this benefit automatically and should switch to a repo-linked loan without delay. Those paying 50 basis points or more above current market rates should explore refinancing now."

The repo rate serves as the benchmark at which the RBI lends to commercial banks. Any change in this rate directly influences borrowing costs across the economy. Most modern floating-rate home loans are linked to external benchmarks such as the repo rate, ensuring faster transmission of policy changes to borrowers. In contrast, loans linked to the Marginal Cost of Funds-based Lending Rate (MCLR) adjust more gradually, delaying the impact of rate movements on EMIs. Fixed-rate loans remain unaffected by such changes.

While the current pause supports borrower sentiment, the trajectory of inflation remains a key variable. Rising fuel and energy prices—driven by geopolitical disruptions—are already feeding into broader household inflation. If inflation accelerates beyond the RBI’s comfort band, the central bank may be compelled to revisit its stance in future policy meetings. That, in turn, could push home loan rates higher.

For now, however, the status quo offers stability. Borrowers on repo-linked loans can expect their EMIs to remain unchanged in the near term, sustaining the gains from earlier rate cuts and providing a window of predictability in an otherwise uncertain macro environment.

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Rate status quo and your home loan

For someone like me with a ₹50 lakh home loan over 20 years, the RBI’s decision to keep the repo rate unchanged at 5.25% is a clear relief. After the earlier rate cuts, my interest rate has come down from around 8.50% to 7.25%, which has reduced my EMI from about ₹43,391 to ₹39,519. That means I’m saving roughly ₹3,000 every month.

Over the full loan tenure, this adds up to a significant saving of nearly ₹7.3 lakh in interest. Since the repo rate hasn’t increased, my EMI stays the same for now, and I continue to benefit from these lower rates. It gives me better monthly cash flow and some breathing room in managing other expenses without worrying about rising loan costs immediately.

 

₹50 lakh home loan, 20 years

 

Earlier interest rate: 8.50% (Before December 2025) Current effective rate (post cuts in December MPC meeting): 7.25% Savings due to lower rates: EMI reduced from: ₹43,391 → ₹39,519 Monthly EMI saving: ~₹3,057 Total interest reduced from: ₹54.13 lakh → ₹44.84 lakh Total interest saved: ~₹7.34 lakh over the loan tenure

For someone with a ₹75 lakh home loan over 20 years, the RBI’s decision to keep the repo rate unchanged at 5.25% comes as a big relief. Following earlier rate cuts, my interest rate has dropped from around 8.50% to 7.25%, bringing my EMI down from about ₹65,087 to ₹59,278. That’s a monthly saving of nearly ₹5,800.

Over the full tenure, this translates into total interest savings of roughly ₹13.94 lakh. With the repo rate on hold, my EMI remains stable, and I continue to benefit from these reduced borrowing costs. It improves my monthly cash flow and provides some certainty, especially at a time when inflation and global risks are still evolving.

₹75 lakh home loan, 20 years:

Earlier interest rate: 8.50% (Before December 2025) Current effective rate (post cuts in December MPC meeting): 7.25%

Savings due to lower rates:

EMI reduced from ₹65,087 to ₹59,278 Monthly EMI saving: ~₹5,809 Total interest reduced from ₹81.21 lakh to ₹67.27 lakh Total interest saved: ~₹13.94 lakh over the loan tenure