How much home loan EMI you are saving now since RBI's last rate cut
April 03, 2026
The RBI’s 125 bps repo rate cut since February 2025 has lowered borrowing costs, bringing the rate to 5.25%. While this has reduced home loan EMIs and interest outgo, further relief may be limited as the central bank pauses.
The upcoming RBI Monetary Policy Committee (MPC) meeting, scheduled for April 6–8, 2026, comes at a delicate juncture for the Indian economy. In its February meeting, the MPC retained the policy repo rate at 5.25 percent and maintained a neutral stance, even as inflation remained broadly aligned with the medium-term target and growth indicators stayed resilient.
The central bank in February 2026 decided to leave the repo rate unchanged at 5.25%, signalling a pause after an aggressive rate-cut cycle in 2025. For borrowers with floating-rate home loans, the message is clear: EMIs are unlikely to fall further for now but the good thing is that the risk of a sudden increase also looks limited.
How RBI cut rates through 2025
Between February and December 2025, the RBI cut the repo rate by a cumulative 125 basis points, bringing it down from 6.50% to 5.25% to support economic growth.
The easing cycle unfolded as follows:
February 2025: Repo rate cut by 25 bps to 6.25%
April 2025: Another 25 bps cut to 6.00%
June 2025: A sharper 50 bps cut to 5.50%
August and October 2025: Rates held steady
December 2025: Final 25 bps cut to 5.25%
February 2026: Rates held steady at 5.25%
ALSO READ: Govt retains inflation target at 4% with 2–6% band for next five years
Real EMI impact
Data from the table highlights the tangible savings borrowers have already seen due to this rate cycle.
For a ₹50 lakh home loan (20-year tenure):
At 8.5% interest: EMI ~₹43,391
At 7.25% interest: EMI ~₹39,519
Monthly savings: ~₹3,000–₹3,800
Total interest saved: ~₹7.3 lakh over the loan tenure
For a ₹75 lakh home loan (20-year tenure):
At 8.5% interest: EMI ~₹65,087
At 7.25% interest: EMI ~₹59,278
Monthly savings: ~₹5,800
Total interest saved: ~₹13.9 lakh
These figures illustrate a critical point: even a 100–125 bps reduction in interest rates has a disproportionately large impact on long-tenure loans like home financing. Borrowers benefit not just through lower EMIs, but also through a substantial reduction in lifetime interest outgo.
ALSO READ: Relying only on bank fixed deposits? You may be missing safer options with higher returns
Why borrowers felt the benefit quickly
Most home loans today are linked to external benchmarks such as EBLR or MCLR, which ensured faster transmission of RBI’s rate cuts. As lending rates fell, borrowers benefited in two key ways—lower monthly EMIs or shorter loan tenures, both of which reduced the total interest paid over time.
For many households, the savings helped cushion the impact of high living costs and inflation.
Where rates stand now
As of early 2026, lending rates have broadly stabilised:
Public sector banks: ~7.15%–7.30%
Private banks: ~7.75%–9.00%
Public sector lenders remain more competitive, while private banks continue to price in a premium based on credit profiles and margins.
What to expect from the April MPC meeting
With inflation largely aligned with the RBI’s 4% target and growth holding steady, the central bank has shifted to a “pause” mode. The February 2026 policy signalled a neutral stance, indicating that the aggressive easing phase may be over for now.
For borrowers, this translates into:
The central bank in February 2026 decided to leave the repo rate unchanged at 5.25%, signalling a pause after an aggressive rate-cut cycle in 2025. For borrowers with floating-rate home loans, the message is clear: EMIs are unlikely to fall further for now but the good thing is that the risk of a sudden increase also looks limited.
How RBI cut rates through 2025
Between February and December 2025, the RBI cut the repo rate by a cumulative 125 basis points, bringing it down from 6.50% to 5.25% to support economic growth.
The easing cycle unfolded as follows:
February 2025: Repo rate cut by 25 bps to 6.25%
April 2025: Another 25 bps cut to 6.00%
June 2025: A sharper 50 bps cut to 5.50%
August and October 2025: Rates held steady
December 2025: Final 25 bps cut to 5.25%
February 2026: Rates held steady at 5.25%
ALSO READ: Govt retains inflation target at 4% with 2–6% band for next five years
Real EMI impact
Data from the table highlights the tangible savings borrowers have already seen due to this rate cycle.
For a ₹50 lakh home loan (20-year tenure):
At 8.5% interest: EMI ~₹43,391
At 7.25% interest: EMI ~₹39,519
Monthly savings: ~₹3,000–₹3,800
Total interest saved: ~₹7.3 lakh over the loan tenure
For a ₹75 lakh home loan (20-year tenure):
At 8.5% interest: EMI ~₹65,087
At 7.25% interest: EMI ~₹59,278
Monthly savings: ~₹5,800
Total interest saved: ~₹13.9 lakh
These figures illustrate a critical point: even a 100–125 bps reduction in interest rates has a disproportionately large impact on long-tenure loans like home financing. Borrowers benefit not just through lower EMIs, but also through a substantial reduction in lifetime interest outgo.
ALSO READ: Relying only on bank fixed deposits? You may be missing safer options with higher returns
Why borrowers felt the benefit quickly
Most home loans today are linked to external benchmarks such as EBLR or MCLR, which ensured faster transmission of RBI’s rate cuts. As lending rates fell, borrowers benefited in two key ways—lower monthly EMIs or shorter loan tenures, both of which reduced the total interest paid over time.
For many households, the savings helped cushion the impact of high living costs and inflation.
Where rates stand now
As of early 2026, lending rates have broadly stabilised:
Public sector banks: ~7.15%–7.30%
Private banks: ~7.75%–9.00%
Public sector lenders remain more competitive, while private banks continue to price in a premium based on credit profiles and margins.
What to expect from the April MPC meeting
With inflation largely aligned with the RBI’s 4% target and growth holding steady, the central bank has shifted to a “pause” mode. The February 2026 policy signalled a neutral stance, indicating that the aggressive easing phase may be over for now.
For borrowers, this translates into: