RBI policy: You will now save Rs 3,000 per month on your 50 lakh home loan EMIs – Here’s how

In a move widely welcomed by the real estate sector, the Reserve Bank of India (RBI) slashed the repo rate by 50 basis points (bps) to 5.5% during its June 6 Monetary Policy review. With this, the central bank has reduced the key lending rate by a cumulative 100 bps in 2025, after two earlier cuts of 25 bps in February and April.

The latest 50 bps cut is expected to significantly reduce home loan interest rates and revive housing demand, especially in the mid- and affordable segments. The 50 bps cut, if banks pass it on entirely to borrowers, could result in over Rs 1,500 per month saving on EMIs on home loans worth Rs 50 lakh taken for 20 years at an interest rate of 8%. If we combine all the three repo rate cuts effected this year, the cumulative decrease in rate comes to 100 bps. Based on the total 100 bps cuts, the monthly benefit on home loan EMIs for borrowers with Rs 50 lakh loan reaches over Rs 3,000.

Experts across the real estate spectrum believe this rate cut is timely and bold. The industry is optimistic that the move will help ease monthly EMIs and improve affordability for new and existing homebuyers.

Also read: RBI’s 50 bps repo rate cut: Check how much your EMI will drop on a Rs 50 lakh home loan over 20 years — Full calculation

According to Shishir Baijal, Chairman and Managing Director at Knight Frank India, the RBI’s stance reflects an intent to rejuvenate the lower and mid-value housing segments, which had shown signs of weakening. He said the cumulative 100 bps cut would improve affordability and could prompt developers to recalibrate their focus on these segments.

Borrowers with good credit score may get home loan at 7.5%

Grahm Realty’s COO and CMO, Ankit Shah, highlighted that the repo rate cut would bring down home loan interest rates from around 8.25% to potentially 7.5% for those with good credit scores. This reduction could lead to EMIs on a Rs 1 crore home loan falling to around Rs 68,000–Rs 70,000, substantially enhancing housing accessibility.

Echoing similar sentiments, Umesh Gowda H.A, Chairman of Sanjeevini Group, said that the move would drive demand in end-user driven markets like Bengaluru, especially in the Rs 50 lakh to Rs 2 crore housing segment, where most of the transactions happen.

From a fintech perspective, Easiloan CEO Pramod Kathuria noted that borrowers of a Rs 50 lakh home loan could save up to Rs 1,500 per month on EMIs — amounting to nearly Rs 4 lakh over 20 years — if the lending rate drops by 0.50%. He cautioned, however, that the rate cut may result in further reduction in fixed deposit returns, affecting retirees and other savers.

Meanwhile, real estate data analytics firm PropEquity underscored the impact of RBI’s move on housing sales and supply. CEO Samir Jasuja stated that the combined 100 bps cut in repo and CRR would support liquidity and cushion new buyers from the effects of rising housing prices.

Also read: Housing sales in tier 2 cities drop 8% in Q1 2025, but value rises 6%: Report

PropEquity data reveals a sharp 36% drop in affordable and mid-income housing supply over the past two years, even as high-end housing grew by 48% in top nine Indian cities.

Ankur Jalan, CEO of Golden Growth Fund, called the RBI’s triple rate cuts a strategic move to stimulate consumption amid global uncertainties. However, he flagged that lower deposit rates could push HNIs and UHNIs toward alternative investments like AIFs in search of higher returns.

Vijay Harsh Jha of VS Realtors said the repo and CRR cuts align with RBI’s growth-supportive policy framework. He expects the decision to sustain momentum in the housing market, which has shown signs of weakness in recent quarters.

Real-time transmission of rate cut to give EMI relief to borrowers

From a credit risk perspective, IMGC’s Chief Risk Officer Kanika Singh observed that real-time transmission of the latest rate cut could bring substantial EMI relief to borrowers. She added that the rate, now at its lowest in nearly three years, reflects RBI’s confidence in India’s economic fundamentals.

Ashok Kapur, Chairman of Krishna Group and Krisumi Corporation, lauded the central bank’s steps as a “strong and timely measure” to support real estate. He emphasized that the CRR cut would improve bank liquidity and encourage homebuyers to invest in property.

Also read: Mumbai sees a 4% fall in property registrations

Borrowers can save up to Rs 6,000 per month on a Rs 1 crore loan over 20 years

Sahil Agarwal, CEO of Nimbus Realty, estimated that borrowers could save up to Rs 6,000 per month on a Rs 1 crore loan over 20 years. He termed the 100 bps reduction in six months as a clear signal of RBI’s belief in India’s economic resilience.

Ankit Kansal, MD of 360 Realtors, called the move “a pleasant surprise,” especially since the industry was expecting a smaller cut. He said the dual benefit of lower home loan rates and easier developer financing could drive a broader housing recovery, particularly for mid-income families.

The rate cut is also expected to benefit the commercial real estate space. Uddhav Poddar, CMD of Bhumika Group, said the move lowers capital costs and could accelerate project execution across the commercial segment, while attracting fresh investments.

With the RBI now adopting a neutral stance, future rate decisions will depend on inflation and economic indicators. However, for now, the June policy marks a clear signal to markets and homebuyers that the central bank is ready to support both growth and affordability.