- RBI keeps the repo rate steady at 5.25 per cent, keeping home loan rates stable
- Banks cut lending rates by 125 bps in 2025, lowering EMIs by about Rs 4,000 on loans
- Stable rates boost market predictability, influencing buyer and developer decisions now
RBI Policy: When the Reserve Bank of India kept the repo rate unchanged at 5.25 per cent, the immediate question for borrowers was simple: will home loans become cheaper?
The short answer is no. But the longer answer is more interesting.
Rates may not fall further, but the stability itself is changing how buyers, investors and developers are approaching the market. Follow Live Updates
After the sharp rate cuts of 2025, most banks had already reduced lending rates by nearly 125 basis points. For a Rs 50 lakh home loan, that has translated into EMIs that are roughly Rs 4,000 lower than the peak seen earlier. With the repo rate now steady, lenders are unlikely to raise rates in the near term. For borrowers, this means predictability.
| Scenario | Interest Rate | Approx EMI | Difference vs Peak |
| Peak rate phase | 9.50 per cent | Rs 46,607 | -- |
| After 125 bps cuts | 8.25 per cent | Rs 42,603 | Rs 4,000 lower |
| After RBI status quo | 8.25 per cent (likely steady) | Rs 42,603 | Stable |
(Illustrative Calculation)
According to real estate experts, this predictability is now influencing buying decisions more than the hope of cheaper loans.
Sudhir A Patel, Director, Shyam Group, says the real estate revival is no longer a headline story but visible on the ground. With interest rates steady, both EMIs and construction costs remain stable. Developers are increasingly offering "rate-lock" schemes that allow buyers to lock current property prices for three to six months, as their own borrowing costs are not rising.
He argues that for projects with a two-to-three-year completion cycle, buyers should consider entering now. "The price cycle determines better timing for real estate investment than the rate cycle," he says.
Manoj Goyal, Director, Forteasia Realty, adds that affordability has already improved after last year's rate cuts. According to him, mid-income and affordable housing developers are seeing higher footfall. The pause by RBI, he says, gives buyers a window to enter before property prices start moving up. "Your delay should not exceed the expenses which result from any possible future rate adjustments," he notes.
In other words, the risk may now lie more in rising property prices than in rising interest rates.
RBI Repo Rate Annoucement: Which Is Better - Rent Or Buy
Vijay Raundal, Managing Director, Teerth Realities, looks at it from a rent-versus-buy perspective. With home loan rates for most borrowers currently in the 7.25 per cent to 8.5 per cent range, and rental yields in top cities at only 3 per cent to 4 per cent, the math increasingly favours ownership. He says stable rates reduce EMI risk for investors and buyers alike. However, he cautions that this momentum is visible largely in affordable and mid-range housing, while luxury housing remains under pressure.
| Metric | Buying | Renting |
| Loan rate | 7.25-8.5 per cent | Not applicable |
| Rental yield | 3-4 per cent | Return to landlord |
| Asset appreciation | Possible | None |
| EMI risk | Reduced due to stable rates | Rent revisions likely |
Anurag Goel, Director, Goel Ganga Developments, makes a blunt point: the steep rate cuts of 2025 are unlikely to repeat. Waiting for even lower rates is, in his words, a futile strategy. Instead, buyers should focus on the asset and local market dynamics. In cities like Ahmedabad, Chennai, and NCR's peripheral zones, prices remain reasonable while rental demand is rising. "Don't speculate on monetary policy. Make purchases based on current cash flow situations," he says.
This shift in thinking is crucial. Buyers are moving from a "rate-watching" mindset to a "value-watching" mindset.
'RBI Decision To Increase Investment Appetite'
For developers, the rate pause is equally significant. Stable funding costs improve visibility for project launches and completion timelines. Several developers say this has revived buyer sentiment and investment appetite as EMIs and borrowing costs are no longer a moving target.
But there is another angle to this rate pause that goes beyond housing.
Senthil Kumar R, MD & CEO, Nitstone Finserv, points out that borrowers today are focusing less on waiting for cheaper loans and more on accessing funds quickly when needed. He says gold loans are increasingly being used as a practical liquidity tool by individuals and small businesses who do not want to sell assets but need immediate cash flow support.
This suggests that the rate pause is encouraging financial planning behaviour beyond just housing decisions.
