The Reserve Bank of India, in its third bi-monthly Monetary Policy Committee (MPC) meeting of the ongoing financial year, has decided to keep the repo rate at which it lends to scheduled commercial banks unchanged at 5.25%. With this, the central bank has maintained the status quo on rate revision for the fourth time in a row.
Now, let’s understand how the RBI rate influences the cost of borrowing in the economy. So when the RBI cuts the repo rate, banks reduce lending rates, making loans cheaper. When it raises the rate, borrowing becomes more expensive. Since the RBI has now kept the repo rate unchanged again, there is unlikely to be any immediate impact on home loan EMIs or other loan interest rates.
Now the impact on borrowers will depend on the nature of their home loans. If their loans are linked to external benchmarks such as the repo rate, they may not see any change in their EMIs. But those who have their loans linked to internal benchmarks like Marginal Cost of Funds Based Lending Rate (MCLR) might still see their banks tweaking the rate.
“For households, this means little immediate change. Existing borrowers should not expect any relief in EMIs, while deposit rates are likely to remain broadly stable. The focus for families should now shift from anticipating rate cuts to managing the impact of inflation on monthly budgets,” said Adhil Shetty, CEO, BankBazaar.
How will an unchanged repo rate impact fixed deposit investors?
By keeping the repo rate unchanged at 5.25%, the RBI has supported stability in deposit rates. Public sector banks are currently offering around 6.6% to 6.75% on popular one to three-year fixed deposits, while private banks are offering roughly 6.3% to 7.5% for similar tenures.
“Rather than investing the entire amount in a single FD, savers can consider laddering FDs by spreading deposits across different maturities. This provides periodic access to funds while reducing the risk of locking the entire corpus into one interest rate,” commented Shetty.
However, investors should evaluate returns after factoring in taxes and inflation, not just the headline FD rate.
Latest FD rates
| Foreign Banks | Up to 1 year | 1 to 2 years | 2 to 3 years | 3 to 5 years | W.e.f |
| DBS Bank | 6 | 6.85 | 6.4 | 6.4 | May 06 |
| Deutsche Bank | 5 | 7 | 6.25 | 6.25 | Jul 25 |
| HSBC | 4.1 | 5.5 | 5.35 | 5.5 | Jul 17 |
| Standard Chartered | 5.75 | 6.6 | 6.5 | 6.5 | Aug |
| PSU Banks | Up to 1 year | 1 to 2 years | 2 to 3 years | 3 to 5 years | W.e.f |
| Bank of Maharashtra | 5.25 | 6.65 | 5.25 | 5 | Jul 27 |
| Bank of Baroda | 6 | 6.6 | 6.5 | 6.4 | Jun 12 |
| Bank of India | 5.5 | 6.6 | 6.7 | 6.25 | May 18 |
| Canara Bank | 5.5 | 6.6 | 6.25 | 6.25 | Mar 17 |
| Central Bank of India | 6.5 | 6.7 | 6.25 | 6 | Jun 10 |
| Indian Bank | 4.75 | 6.8 | 6.75 | 6.05 | Jun 05 |
| Indian Overseas Bank | 5.5 | 6.6 | 6.4 | 6.1 | May 15 |
| Punjab National Bank | 5.6 | 6.6 | 6.35 | 6.35 | Jun 01 |
| Punjab & Sind Bank | 4.85 | 6.85 | 6.1 | 5.95 | Jun 16 |
| State Bank of India | 5.9 | 6.45 | 6.4 | 6.3 | Dec 15 |
| UCO Bank | 5 | 6.45 | 6.1 | 6 | Apr 01 |
| Union Bank | 5.6 | 6.65 | 6.1 | 6 | Jun 01 |
| Private Sector Banks | Up to 1 year | 1 to 2 years | 2 to 3 years | 3 to 5 years | W.e.f |
| Axis Bank | 5.75 | 6.5 | 6.5 | 6.5 | Jul 31 |
| Bandhan Bank | 4.2 | 7.45 | 7.45 | 7.25 | Jun 20 |
| CSB Bank | 6.75 | 7.35 | 6.5 | 5.75 | Apr 06 |
| City Union Bank | 6.25 | 7.25 | 6.5 | 6.25 | Jun 16 |
| DCB Bank | 6.5 | 7.5 | 7.5 | 7.5 | Jun 01 |
| Dhanlaxmi Bank | 7 | 7.1 | 6.5 | 7.25 | Jul 23 |
| Federal Bank | 6 | 6.6 | 6.4 | 6.7 | Jul 16 |
| HDFC Bank | 5.75 | 6.45 | 6.45 | 6.5 | Mar 06 |
| ICICI Bank | 5.5 | 6.3 | 6.45 | 6.5 | Jul 31 |
| IDBI Bank | 5.8 | 6.45 | 6.5 | 6.35 | Feb 23 |
| IDFC First Bank | 6.5 | 7.25 | 7.25 | 6.75 | Jul 25 |
| IndusInd Bank | 6.25 | 7 | 7 | 6.65 | Jul 24 |
| J & K Bank | 6 | 6.8 | 7.3 | 6.75 | Jul 11 |
| Karnataka Bank | 5.75 | 7 | 6.15 | 6.15 | Jun 08 |
| Kotak Bank | 6 | 6.8 | 6.8 | 6.4 | Jun 10 |
| Karur Vysya Bank | 7 | 7.2 | 6.55 | 6.55 | Jun 08 |
| RBL Bank | 6.05 | 7.2 | 7.2 | 7 | Sep 24 |
| South Indian Bank | 5.9 | 6.6 | 6.8 | 6.2 | Jun 19 |
| Tamilnad Mercantile Bank | 6.5 | 7.25 | 7 | 6.7 | Apr 10 |
| TNSC Bank | 6.85 | 7.6 | 7.1 | 6.85 | NA |
| Yes Bank | 6.5 | 7 | 7 | 6.75 | Jun 02 |
| Small Finance Banks | Up to 1 year | 1 to 2 years | 2 to 3 years | 3 to 5 years | W.e.f |
| AU Small Finance Bank | 6.35 | 7.1 | 7.4 | 7 | Jun 10 |
| Equitas Small Finance Bank | 6.35 | 7.1 | 7.75 | 8 | Jun 16 |
| ESAF Small Finance Bank | 6 | 7.75 | 7.75 | 6 | Jun 18 |
| Jana Small Finance Bank | 7 | 7.3 | 8 | 7.77 | Jun 23 |
| Suryoday Small Finance Bank | 6.5 | 7.6 | 8.1 | 7.9 | Mar 29 |
| Utkarsh Small Finance Bank | 6 | 8.1 | 7.5 | 7.25 | May 05 |
| Ujjivan Small Finance Bank | 6 | 7.8 | 7.25 | 7.55 | Jun 22 |
Data as on respective banks’ websites on 31 Jul 2026; compiled by BankBazaar.
How will an unchanged repo rate impact home loan borrowers?
The RBI’s decision to keep the repo rate unchanged at 5.25% means home loan borrowers are likely to see little immediate change in lending rates.
“Floating home loan rates currently range from about 7.0% to 9.4% at public sector banks and 7.3% to 9.3% at private banks, depending on the borrower’s credit profile. With the MPC indicating that inflation remains the key policy focus, borrowers should view the current rate environment as one of stability,” said Shetty.
Individuals should take a home loan by comparing lenders on spreads, processing charges and repayment flexibility rather than wait for a policy-led reduction in rates.
The Reserve Bank of India (RBI) lowered the policy repo rate by a cumulative 125 basis points (bps) across 2025, bringing the rate down from 6.50% to 5.25%.
The cycle began with a 25-basis-point cut in February 2025, bringing the repo rate down from 6.50% to 6.25%. This was followed by another 25-basis-point reduction in April 2025, taking the benchmark rate to 6.00%.
In June 2025, the RBI delivered a larger-than-usual 50-basis-point cut, lowering the repo rate to 5.50% in a bid to support economic growth. The easing cycle concluded with a final 25-basis-point reduction in December 2025, bringing the repo rate to its current level of 5.25%. Since then, the central bank has maintained the repo rate at 5.25%, signalling a pause after the cumulative 125-basis-point easing cycle.
Here’s an example of the impact on borrowers of a 125 bps repo rate cut
| Cumulative Impact of 125 bps repo rate cut on Rs.50 lakh loan | ||
| Original Loan | Lower Rate, Lower EMI | |
| Loan | Rs 50,00,000.00 | Rs 50,00,000.00 |
| Tenor | 240 | 240 |
| Rate | 8.50% | 7.25% |
| EMI | Rs 43,391.16 | Rs 39,518.80 |
| Total Interest | Rs 54,13,878.80 | Rs 44,84,511.82 |
| Interest Saved | Rs 0.00 | Rs 9,29,366.98 |
| EMI Saved | Rs 0.00 | Rs 3,872.36 |
| Numbers approximate. Actual numbers may depend on the borrower’s profile; Source: Bankbazaar.com | ||
Disclaimer: This article is for informational purposes only and should not be construed as investment, financial, tax, or legal advice. Any illustrations, examples, or return projections used in this article are for explanatory purposes only and do not guarantee actual investment outcomes. The views and opinions expressed by experts quoted in this article are their own and should not be considered investment recommendations. Readers should consult a qualified professional before making any financial decisions.
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