The Reserve Bank of India (RBI) on Wednesday kept the repo rate unchanged at 5.25% in its April 2026 Monetary Policy Committee (MPC) meeting, in line with expectations. The central bank retained its “neutral” stance, signalling a pause in the rate-cut cycle that began in early 2025.
The decision comes amid persistent inflation concerns driven by global uncertainties, elevated crude oil prices, and geopolitical tensions. By holding rates steady, the RBI has chosen to prioritise macroeconomic stability while assessing the full transmission of earlier cuts.
Commenting on today’s MPC decision, Adhil Shetty, CEO, BankBazaar.com, 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.”
No fresh relief, but borrowers already gained big
While today’s policy does not bring immediate EMI relief, home loan borrowers have already seen substantial benefits from the 125 basis points (bps) repo rate cuts delivered in 2025.
Shetty said that 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 approximately Rs 7.34 lakh. On a Rs 75 lakh loan, the monthly saving is approximately Rs 5,800, with total interest savings of around Rs 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.”
Echoing similar views, Umesh Gowda H A, chairman and founder of Sanjeevini Group, says, “While borrowers may not see an immediate reduction in EMIs, the stability in interest rates provides much-needed predictability for homebuyers. Over the past cycles, home loan rates under 8% have given homebuyers a good opportunity to enter the market while existing customers have already benefited from relatively moderate borrowing costs, translating into substantial long-term savings.”
Here’s the cumulative impact shown in through these two tables below:
| Cumulative Impact of 125 bps repo rate cut on Rs.50 lakh loan | ||
| Original Loan | Lower Rate, Lower EMI | |
| Loan | ₹ 5,000,000.00 | ₹ 5,000,000.00 |
| Tenor | 240 | 240 |
| Rate | 8.50% | 7.25% |
| EMI | ₹ 43,391.16 | ₹ 39,518.80 |
| Total Interest | ₹ 5,413,878.80 | ₹ 4,484,511.82 |
| Interest Saved | ₹ 0.00 | ₹ 733,693.60 |
| EMI Saved | ₹ 0.00 | ₹ 3,057.06 |
| Numbers approximate. Actual numbers may depend on lender’s unique policies. Source: Bankbazaar.com | ||
| Cumulative Impact of 125 bps repo rate cut on Rs.75 lakh loan | ||
| Original Loan | Lower Rate, Lower EMI | |
| Loan | ₹ 7,500,000.00 | ₹ 7,500,000.00 |
| Tenor | 240 | 240 |
| Rate | 8.50% | 7.25% |
| EMI | ₹ 65,086.74 | ₹ 59,278.20 |
| Total Interest | ₹ 8,120,818.20 | ₹ 6,726,767.73 |
| Interest Saved | ₹ 0.00 | ₹ 1,394,050.47 |
| EMI Saved | ₹ 0.00 | ₹ 5,808.54 |
| Numbers approximate. Actual numbers may depend on lender’s unique policies. Source: Bankbazaar.com | ||
This means borrowers linked to repo-based lending rates (RLLR) are already enjoying lower EMIs or shorter loan tenures, depending on how banks have passed on the benefits.
What the status quo means for you
1. EMIs remain stable: With no change in repo rate, home loan EMIs are unlikely to change immediately unless banks revise spreads or reset cycles kick in.
2. Benefits of past cuts will continue: Borrowers will keep benefiting from lower interest outgo locked in after last year’s easing cycle.
3. Wait-and-watch on future rate moves: The RBI’s stance suggests it is not in a hurry to cut rates further, unless inflation shows a sustained decline.
Why RBI hit pause
The MPC’s decision reflects a cautious approach:
-Inflation risks remain due to high global commodity prices
-External uncertainties continue to pose risks to price stability
-Need to ensure earlier rate cuts fully transmit through the banking system
In essence, the RBI is balancing growth support with inflation control, rather than pushing for further monetary easing.
FD investors continue to feel the pinch
The rate pause also means deposit rates are unlikely to move up meaningfully, after already declining during the easing phase.
Commenting on previous rate cuts impact on term deposits for customers, Shetty said, “On fixed deposits, select private bank tenures are offering up to 7.4%, with several others in the 7–7.2% range. Senior citizens can add another 25–50 basis points on most products. The rate trajectory from here is genuinely uncertain — the MPC has warned that a supply shock could evolve into a demand shock if energy prices stay elevated.”
| Impact of staggered repo rate cuts on FD Returns | ||
| FD rate | Returns per lakh | Interest lost |
| 7.25% | ₹ 7,250.00 | ₹ 0.00 |
| 7.00% | ₹ 7,000.00 | ₹ 250 |
| 6.75% | ₹ 6,750.00 | ₹ 250 |
| 6.50% | ₹ 6,500.00 | ₹ 250 |
| Note: Illustrative figures based on simple interest for one year; Actual returns may vary by lender policy; Compiled by BankBazaar.com | ||
| Cumulative 125 bps cut impact on FD returns | ||
| FD rate | Returns per lakh | Interest lost |
| 7.25% | ₹ 7,250.00 | ₹ 0.00 |
| 6.00% | ₹ 6,000.00 | ₹ 1,250 |
| Note: Illustrative figures based on simple interest for one year; Actual returns may vary by lender policy; Compiled by BankBazaar.com | ||
So, a drop from 7.25% to 6% FD rate leads to returns per ₹1 lakh falling from ₹7,250 to ₹6,000 and annual loss of ₹1,250 per lakh.
So while borrowers gained from cheaper loans, fixed deposit investors have seen their returns shrink.
Summing up…
The RBI’s decision to hold rates steady may seem uneventful, but for borrowers:
The real gains have already been delivered in 2025
EMIs are significantly lower than last year
Stability in rates offers predictability in repayments
For now, the central bank has chosen caution over action—and for home loan borrowers, the relief already in place continues to work in their favour.
Disclaimer:
The figures used above are illustrative and based on standard assumptions regarding interest rates, tenure, and full transmission of repo rate changes. Actual loan EMIs, savings, and interest costs may vary depending on lender policies, reset frequency, borrower profile, and loan terms. Readers should consult their financial advisor or lender for personalised calculations.