RBI Repo Rate Cut: Good News Likely for Home Buyers? SBI Report Suggests Major Rate Reduction

The Reserve Bank of India (RBI) has already lowered the repo rate twice this year, in February and April. Each time, it was by 25 basis points. Some people think that the RBI might lower the repo rate by another 0.25% or even 0.50% at the Monetary Policy Committee (MPC) meeting in June. According to SBI's study report, this is likely to happen. This could help home buyers a lot by making home loans cheaper.

Changes to EMIs and interest rates on home loans

Banks usually lower their lending rates when the RBI lowers the repo rate. This is especially true for home loans with rates that change based on the repo rate. In other words, borrowers can expect their EMIs to go down, making them more affordable. But when these cuts happen depends on when each bank resets their rates, so the full benefits may not show up for a quarter or more. People whose loans are tied to older measures, such as MCLR or base rate, may see benefits that come more slowly or indirectly.

Positive Effects on the Real Estate Market

Some experts think that lowering the repo rate will make more people want to buy homes. Lower interest rates on loans attract both first-time buyers and investors, which could raise demand for homes across all groups. This boom can also help related businesses grow, like cement, steel, and construction equipment, which is good for the economy as a whole. Developers are ready to take advantage of this by starting projects faster and making the quality of the building better.

The RBI's policy stance on inflation

One big reason the RBI might cut rates again is that inflation is low right now. In April 2025, retail inflation was only 3.16 percent, which is well below the RBI's goal range. This lets the central bank focus on growth by lowering the cost of getting money without putting inflation at risk.

In conclusion

According to SBI's report, the RBI repo rate is likely to be lowered. This is good news for people who want to buy a home because it can lower their loan costs and EMIs. The real benefit, though, rests on how quickly banks pass on the lower rates and the types of loans that people take out. If this move is made, it could boost demand for homes and keep the economy growing in 2025.