- विज्ञापन -
New Delhi: The RBI’s recent 50 basis point cut in interest rates is set to greatly advantage home loan borrowers, especially those with existing loans, by reducing their interest payments, experts stated on Friday. This decision is particularly timely as India, now the world’s fourth-largest economy, is witnessing strong growth in real estate, both in major cities and smaller towns.
Shekhar G Patel, President of CREDAI, commented that lower lending rates will make home financing more accessible, mainly for middle-income and affordable housing sectors. He added that decreased EMIs are likely to boost buyer confidence and motivate first-time buyers to enter the market.
The repo rate, at which the RBI lends to banks, directly influences the interest rates that banks offer to consumers. When the repo rate declines, banks usually pass on the benefit by lowering their lending rates, resulting in cheaper personal, home, and business loans, and smaller EMIs. Under the external benchmark lending system, existing borrowers will enjoy the full benefit of the 50-basis-point rate cut.
Amit Bivalkar, Founder of Sapient Finserv, emphasized that this rate cut was larger than anticipated, as most expected only a 25-basis-point reduction. It is part of a series of cuts since February 2025, totaling 100 basis points, aimed at boosting the economy through cheaper loans and increased liquidity.
Kanika Singh from IMGC pointed out that earlier rate cuts had already helped borrowers, and with the current 50-basis-point decrease, EMIs are likely to fall significantly—assuming the rate reductions are transmitted promptly and effectively.
