Repo Rate Stays At 5.25% After RBI MPC Meet, Yet Smart Borrowers May Still Unlock Big Home Loan EMI Savings

Mumbai: Reserve Bank of India has kept the repo rate unchanged at 5.25 percent after its latest Monetary Policy Committee meeting held on February 6. This means home loan EMIs linked directly to the repo rate are unlikely to change immediately. The RBI had earlier reduced the repo rate by 25 basis points in December 2025, which had helped borrowers reduce interest costs.

Why RBI Did Not Cut Rates This Time?

The central bank avoided a rate cut mainly because inflation is under control and deposit rates remain high due to competition from small savings schemes. Also, the 10-year government bond yield is still around 6.65 percent, which limits how much banks can reduce lending rates. These factors made the RBI choose a wait-and-watch approach.

Can Rates Fall in Future?

There is still a chance of rate cuts later. If inflation reduces further, deposit rates fall, and bond yields soften, RBI may consider lowering rates again. If that happens, repo-linked home loan borrowers will benefit first as their loan interest rates change faster.

How You Can Save Even Without Rate Cut?

Many borrowers are still paying loans linked to MCLR, Base Rate, or BPLR, where interest rates fall slowly. These borrowers may still be paying higher interest than repo-linked loans. Comparing current loan rates and shifting to repo-linked loans can help reduce interest costs.

Switching Loan Regime

Borrowers can request banks to shift their loan from MCLR or Base Rate to repo-linked rates. Banks usually allow this after charging a small fee. This option is generally available only for bank loans. NBFC borrowers may need to refinance instead.

Refinancing Home Loan

Refinancing means shifting your loan to another lender offering a lower rate. For example, if Rs 50 lakh loan shifts from 8.5 percent to 7.5 percent, total savings can be about Rs 7.47 lakh over 20 years. Higher loan amounts can lead to even bigger savings.

Prepayment: A Simple Way to Cut Interest

Prepaying part of the loan reduces total interest. Borrowers can either reduce EMI or reduce loan tenure. Keeping EMI same and reducing tenure usually saves more interest. Prepayment in early years gives maximum savings because interest is higher at the start of the loan.

Even without rate cuts, borrowers still have multiple ways to reduce home loan costs. Smart planning can help save lakhs in interest and reduce loan burden faster over time.