RBI Repo Rate Cut: Home Loan Borrowers Can Save Up to ₹9 Lakh on a ₹50 Lakh Loan — Here’s How

In a significant easing of the situation for homebuyers, the Reserve Bank of India (RBI) has slashed the repo rate by 25 basis points, bringing it down from 5.5% to 5.25%. The latest reduction has brought the total reduction in the repo rate for this year to 125 basis points, renewing the hope of the borrowers for reduced EMIs in the upcoming months.

The banks have already started adjusting their lending rates, a move that indicates the beginning of an affordable market for both new and existing home loan customers.

Lower EMIs, Higher Savings

“The 25 bps rate cut is a clear signal that the policy is now leaning towards growth. The borrowers will experience slight but substantial relief as banks will alter their lending rates,” said Adhil Shetty, the CEO of BankBazaar.

Shetty illustrated that the sum total of 125 bps cut down this year could help borrowers save a huge amount:

How Much Can Borrowers Save?

If a borrower takes a ₹50 lakh housing loan for 20 years, the borrower can expect:

An EMI cut of ₹800-₹1,000 per month

Total interest savings of approximately ₹9 lakhs

More than ₹10 lakhs savings if the borrower keeps EMIs steady and shortens the loan tenure.

This places it amongst the most borrower-friendly times in the recent years.

What Should Home Loan Borrowers Do Now?

To say it in the words of Rajat Bokolia, the CEO of Newstone, the floating home loan rates of top banks like SBI and PNB have already been reduced to 7.75-8.35%. Hence, the borrower’s capability to afford has been increased.

He also stated that the lower EMIs not only make it easier for buyers but also increase the real estate demand, which in turn provides the developers with the advantage of faster sales and easier financing.

The existing borrowers particularly stand to benefit from the situation:

Do not change EMI → cut down tenure → save lakhs more

Find out if your bank has already implemented the entire rate cut

Think about the option of refinancing if your lender takes time to lower the rates

Market Sentiment: Will Home Sales Rise?

Although the prices of apartments in key cities have gone up, the sentiment in the real estate market is expected to get better.

Anuj Puri, the Chairman of ANAROCK Group, claims that rapid rate transmission may give sales momentum that is strong until Q1 2026.

ANAROCK Research indicates that in 2025, the average housing prices across the top 7 cities have increased by 10%, hence, putting pressure on buyers. Puri thinks that the latest rate cut will embolden many buyers waiting for the right time to buy before the end of the year.

“This reduction is a powerful sentiment booster and might make buyers who were on the periphery decide to buy,” Puri remarked.

Best Home Loan Interest Rates (December 2025)

As per Paisabazaar

What is more? A fast and straightforward overview of the current housing loan rates at public sector banks, private banks, and housing finance companies (HFCs) is given below:

Public Sector Banks

State Bank of India (SBI)

All loan amounts: 7.50% – 8.95%

Punjab National Bank (PNB)

₹30 lakh & above: 7.45% – 9.35%

Bank of Maharashtra

All slabs: 7.35% – 10.15%

Indian Overseas Bank

All slabs: 7.35% onwards

Indian Bank

All slabs: 7.40% – 9.40%

Private Sector Banks

Kotak Mahindra Bank

All slabs: 7.70% onwards

ICICI Bank

All slabs: 7.65% onwards

HSBC

All slabs: 7.70% onwards

South Indian Bank

All slabs: 7.80% onwards

Karnataka Bank

All slabs: 7.30% – 11.68%

HDFC Bank

All slabs: 7.90% onwards

Housing Finance Companies (HFCs)

LIC Housing Finance

All slabs: 7.50% onwards

Tata Capital

All slabs: 7.75% onwards

Aditya Birla Capital

All slabs: 7.75% onwards

ICICI Home Finance

All slabs: 7.50% onwards

Godrej Housing Finance

All slabs: 7.75% onwards