Big Relief For Buyers! Home Loans to Get Cheaper After RBI MPC Repo Rate Cut! Industry Experts Weigh In

Home Loan: The Reserve Bank of India (RBI) has announced a much-anticipated cut in the repo rate, bringing it down by 25 basis points to 6.25%. This decision, welcomed by the real estate sector, is expected to encourage homebuyers and improve housing affordability.

RBI Governor Sanjay Malhotra stated that the Monetary Policy Committee (MPC) unanimously decided to maintain a neutral stance, balancing inflation control with economic growth.

Real Estate Leaders Applaud the Move

Industry experts believe this rate cut will complement recent government measures, further boosting economic activity.

Boman Irani, President of CREDAI National, highlighted its significance, saying, “This decision aligns with recent Budget announcements, strengthening liquidity and driving economic expansion.” He added that the reduction follows a recent 50-basis-point cut in the Cash Reserve Ratio (CRR), which has already infused additional funds into the banking system.

Impact of RBI MPC Rate Cut on Home Loan Rates and Housing Demand

Lower interest rates generally lead to reduced home loan costs, making property ownership more accessible. Dr Niranjan Hiranandani, Chairman of NAREDCO, pointed out that this strategic move comes at a crucial time.

“With inflation under control, a moderate fiscal deficit, and stable economic growth, the repo rate cut reinforces resilience in the economy,” he stated. He also noted that despite global uncertainties, India’s domestic economy remains strong.

Hiranandani further emphasised that tax benefits introduced in the FY26 Budget, combined with this rate cut, will accelerate home sales.

Increased Affordability in the Housing Market

Shishir Baijal, Chairman and Managing Director of Knight Frank India, expects this move to stimulate housing demand.

“Lower borrowing costs will make home loans more attractive, encouraging buyers, particularly in the below ₹50 lakh segment, where demand has been sluggish,” he noted.

He expressed hope that banks would pass on the benefits to consumers, making housing more affordable across various price brackets.

A Positive Outlook for Economic Growth

This repo rate reduction, the first since May 2020, is likely to enhance liquidity in the banking system. Improved financial conditions could benefit key sectors like infrastructure and housing, driving investment and consumption.

With homebuyers gaining confidence and market conditions improving, the real estate sector is set to witness increased momentum in the coming months.