The Reserve Bank of India (RBI) on Wednesday kept the policy repo rate unchanged at 5.25 per cent, maintaining a pause in its rate cycle amid global uncertainties linked to the West Asia conflict and rising energy prices.

The decision, taken by the Monetary Policy Committee (MPC) in its April 6–8 meeting, means there will be no immediate change in borrowing costs for retail and corporate loans that are linked to the repo rate.

For borrowers, especially those with home loans, the status quo translates into stable equated monthly instalments (EMIs). Since banks link many floating-rate loans directly to the repo rate, any change in the policy rate typically impacts EMIs. With rates unchanged, borrowers will continue to pay the same monthly instalments.

Adhil Shetty, CEO of BankBazaar, said, “The RBI has held the repo rate at 5.25 per cent 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.”

He added that borrowers on repo-linked loans are already benefiting from earlier rate cuts. “Home loan borrowers on repo-linked products are already seeing the benefit of the 125 basis points delivered since early 2025. On a Rs 50 lakh, 20-year loan, that translates to an EMI saving of around Rs 3,050 per month and a lifetime interest saving of Rs 7.34 lakh. On a Rs 75 lakh loan, the monthly saving is approximately Rs 5,800, with total interest savings of Rs 13.94 lakh.”

Impact of 125 bps repo rate cut on EMIs

Cumulative Impact of 125 bps repo rate cut on Rs 50 lakh loan

Numbers approximate. Actual numbers may depend on the lender’s unique policies.

Cumulative Impact of 125 bps repo rate cut on Rs 75 lakh loan

Numbers approximate. Actual numbers may depend on the lender’s unique policies.

A repo-linked loan is directly tied to the RBI’s benchmark rate, which ensures faster transmission of policy changes. When the RBI cuts rates, EMIs fall quickly. Similarly, when rates rise, EMIs increase.

However, not all borrowers benefit equally. Those with loans linked to the marginal cost of funds-based lending rate (MCLR) may not see immediate changes in EMIs, as these rates are reset periodically.

Shetty said, “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.”

For new borrowers, the unchanged rate provides predictability. Stable interest rates make it easier to plan long-term finances, particularly for large-ticket loans such as housing.

Real estate sector experts said the RBI’s decision will support homebuyer sentiment. Anuj Puri, Chairman of ANAROCK Group, said, “Keeping rates steady means stability for current and future home loan borrowers. EMIs will remain unchanged, which makes planning for the future easier.”

He added that housing demand remains resilient despite some moderation. “In the first quarter of 2026, about 1,01,675 units worth Rs 1.51 lakh crore were sold in the top seven cities. This is a 7 per cent drop from the previous quarter, but the continued activity shows that the market is resilient and the fundamentals remain robust.”

Industry players said a stable rate environment helps maintain affordability. Lower or steady EMIs encourage homebuyers to proceed with purchases, particularly in a volatile global environment.

Ramani Sastri, Chairman and Managing Director of Sterling Developers, said, “The decision to keep the repo rate unchanged reinforces a supportive environment for the real estate sector. Homebuyers are currently driven by long-term confidence rather than short-term rate fluctuations.”

He added that a future rate cut could further boost demand. “We are hopeful of a rate cut in the near future as it would be highly encouraging for homebuyers and developers alike, potentially boosting affordability and investments in the sector.”

For commercial real estate, stable rates reduce uncertainty around borrowing costs. This supports investment decisions and expansion plans by businesses.

Manas Mehrotra, Founder of 315Work Avenue, said, “Steady interest rates provide much-needed stability in borrowing costs and support sustained leasing momentum and long-term investment decisions.”

He added that easier credit conditions help attract investors. “Easier credit availability attracts both individual and institutional investors, driving real estate growth.”

Apart from loans, the RBI’s decision also has implications for depositors. Interest rates on fixed deposits are likely to remain broadly stable in the near term.

Shetty noted that some banks are offering competitive returns. “On fixed deposits, select private bank tenures are offering up to 7.4 per cent, with several others in the 7–7.2 per cent range. Senior citizens can add another 25–50 basis points on most products.”

He advised depositors to consider locking in rates. “The rate trajectory from here is genuinely uncertain. Depositors would be well-advised to lock in at current levels rather than assume rates will stay where they are.”

The RBI’s decision reflects a cautious approach as it balances inflation risks with growth concerns. For borrowers, the immediate impact is limited but positive, with EMIs remaining stable and earlier benefits from past rate cuts continuing.

The central bank has indicated that it will remain watchful of global developments, especially energy prices and supply chain disruptions, before taking further action.