- विज्ञापन -
New Delhi: The Reserve Bank of India’s (RBI) recent 50 basis points rate cut will significantly benefit home loan borrowers, especially those already holding loans, by lowering their interest costs, experts said on Friday. This move is timely as India, now the fourth-largest global economy, is experiencing robust growth in real estate across major metros, as well as smaller cities.
Shekhar G Patel, President of the Confederation of Real Estate Developers’ Associations of India (CREDAI), explained that reduced lending rates will make home loans more affordable, particularly for mid-income and affordable housing segments. Lower EMIs are expected to boost buyer confidence and encourage first-time homebuyers to enter the market.
The repo rate, which is the rate at which RBI lends to banks, influences the interest rates banks charge to customers. When the repo rate drops, banks typically pass on the benefit by lowering lending rates, making personal, home, and business loans cheaper, and reducing EMIs. Existing borrowers will benefit fully from the 50-basis-point reduction due to external benchmark lending rules.
Amit Bivalkar, Founder Director of Sapient Finserv, noted that the rate cut was larger than expected, as most anticipated only a 25-basis-point reduction. This is part of a series of rate cuts since February 2025, totaling 100 basis points, aiming to stimulate the economy by making loans more affordable and improving liquidity.
Kanika Singh, Chief Risk Officer at India Mortgage Guarantee Corporation (IMGC), highlighted that the previous rate cuts had already started to benefit borrowers, and with the latest 50-basis-point reduction, EMIs are expected to decrease significantly, provided the transmission of rate cuts happens promptly and in real time.
