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RBI Holds Rates at 5.25%; Home Loan Borrowers Continue to Benefit from Earlier Cuts
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The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.25% in its April 2026 Monetary Policy Committee (MPC) meeting, in line with market expectations. Although this means no immediate reduction in EMIs, home loan borrowers are still enjoying substantial savings due to rate cuts implemented last year.
The central bank has maintained a “neutral” policy stance, indicating a pause in the easing cycle that started in early 2025. The decision reflects ongoing concerns over inflation, influenced by global uncertainties, rising crude oil prices, and geopolitical tensions.
By holding rates steady, the RBI aims to ensure economic stability while allowing the effects of previous rate cuts to fully pass through the system.
According to Adhil Shetty, CEO of BankBazaar.com, this pause is not merely routine but a cautious move in response to external risks, particularly supply disruptions linked to tensions in West Asia. He noted that crude oil prices have exceeded earlier projections, prompting the central bank to adopt a wait-and-watch approach.
Despite the pause, borrowers with repo-linked home loans are already benefiting from the cumulative 125 basis points reduction since early 2025. For instance, on a ₹50 lakh loan with a 20-year tenure, borrowers are saving roughly ₹3,000 per month, translating into total interest savings of over ₹7 lakh. For a ₹75 lakh loan, the monthly savings are close to ₹5,800, with overall savings nearing ₹14 lakh.
However, borrowers with loans linked to the MCLR benchmark may not automatically see these benefits. Experts suggest such borrowers consider switching to repo-linked loans or refinancing, especially if they are paying significantly higher interest rates than current market levels.
Umesh Gowda H A, chairman and founder of Sanjeevini Group, added that while EMIs may not fall immediately, stable interest rates provide clarity and confidence to homebuyers. He also highlighted that relatively lower home loan rates in recent cycles have supported both new buyers and existing borrowers in achieving meaningful long-term savings.
The central bank has maintained a “neutral” policy stance, indicating a pause in the easing cycle that started in early 2025. The decision reflects ongoing concerns over inflation, influenced by global uncertainties, rising crude oil prices, and geopolitical tensions.
By holding rates steady, the RBI aims to ensure economic stability while allowing the effects of previous rate cuts to fully pass through the system.
According to Adhil Shetty, CEO of BankBazaar.com, this pause is not merely routine but a cautious move in response to external risks, particularly supply disruptions linked to tensions in West Asia. He noted that crude oil prices have exceeded earlier projections, prompting the central bank to adopt a wait-and-watch approach.
Despite the pause, borrowers with repo-linked home loans are already benefiting from the cumulative 125 basis points reduction since early 2025. For instance, on a ₹50 lakh loan with a 20-year tenure, borrowers are saving roughly ₹3,000 per month, translating into total interest savings of over ₹7 lakh. For a ₹75 lakh loan, the monthly savings are close to ₹5,800, with overall savings nearing ₹14 lakh.
However, borrowers with loans linked to the MCLR benchmark may not automatically see these benefits. Experts suggest such borrowers consider switching to repo-linked loans or refinancing, especially if they are paying significantly higher interest rates than current market levels.
Umesh Gowda H A, chairman and founder of Sanjeevini Group, added that while EMIs may not fall immediately, stable interest rates provide clarity and confidence to homebuyers. He also highlighted that relatively lower home loan rates in recent cycles have supported both new buyers and existing borrowers in achieving meaningful long-term savings.
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