RBI Keeps Repo Rate Unchanged; Rs 50 Lakh Home Loan Borrowers Could Save Up to Rs 15.4 Lakh

 

The Reserve Bank of India (RBI) on Wednesday maintained the repo rate at 5.5 per cent, providing relief to borrowers and property developers. The decision, coupled with recent GST cuts, has been welcomed as a confidence booster for homebuyers.

 

In its August policy review, the RBI had also kept rates steady as inflation showed signs of easing. Adhil Shetty, CEO of Bankbazaar, noted that the pause comes after a total reduction of 100 basis points since the start of the year, benefiting both borrowers and depositors.

 

Significant Savings for Home Loan Borrowers

 

Shetty explained that borrowers stand to gain substantially. For a Rs 50 lakh loan over 20 years, the reduction from 8.5 per cent to 7.5 per cent could save around Rs 7.5 lakh. If borrowers continue paying the same EMI, the total savings over the loan tenure may reach Rs 15.4 lakh. He added that stable bank spreads and festive discounts on processing fees make this an attractive time to invest in a home.

 

Developers echoed the sentiment, highlighting that the combination of RBI stability and GST reductions is encouraging. Anurag Goel, Director at Goel Ganga Developments, said that lower GST rates on building materials and related costs are making housing more affordable. Raghav Malhotra of PRIME Developments added that consumer confidence is rising, particularly in emerging residential corridors such as Golf Course Extension Road, Dwarka Expressway, and Faridabad.

 

Cautious Views from the Sector

 

Not all experts were optimistic. Anuj Puri, Chairman of ANAROCK Group, pointed out that while stability supports sentiment, it does not directly improve affordability. Current borrowers will see no immediate EMI change, while new borrowers will face steady interest rates. ANAROCK data show that Q3 2025 residential sales across seven major cities dropped 9 per cent year-on-year to 97,080 units, though overall sales value increased 14 per cent to Rs 1.52 lakh crore, reflecting demand for premium and mid-segment homes.

 

GST cuts are expected to improve affordability, especially in lower price segments. Puri noted that with GST on cement reduced from 28 per cent to 18 per cent, construction costs may fall by 3-5 per cent, potentially reducing home prices by 1-1.5 per cent and saving buyers Rs 1-3 lakh in affordable and mid-segment housing.

 

Impact on Borrowers

 

RBI data show that the Weighted Average Lending Rate (WALR) for fresh loans fell by 58 basis points between February and October 2025, indicating effective transmission of the year’s 100-basis point cut. Shetty added that for borrowers with strong credit scores, rates have dropped from 8.4 per cent in January to 7.35 per cent in September. A 100-basis point fall translates into savings of Rs 14,935 per lakh for a 20-year loan, with additional potential savings if borrowers keep EMIs unchanged. Festive offers on lower or waived processing fees further enhance affordability.