New Delhi: The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points (bps) in its latest Monetary Policy Committee (MPC) meeting, bringing the repo rate down to 5.25%. This is the fourth cut in 2025, totaling 125 bps reduction so far. Earlier cuts of 25 bps each were made in February and April, and 50 bps in June. While the October meeting saw no change, today’s cut is expected to directly benefit floating-rate home loans, particularly those linked to the External Benchmark Lending Rate (EBLR).
Impact on EMIs: The reduction in repo rate is likely to lower interest rates for borrowers, but the extent of savings depends on how quickly banks pass on this benefit to customers.
Estimated Savings on Different Loan Amounts:
- ₹25 Lakh Loan | 15-Year Tenure | 8.5% Interest Rate
- Current EMI: ₹24,618
- New EMI at 8.25%: ₹24,254
- Total Interest Now: ₹19,31,328
- Total Interest After Cut: ₹18,65,632
- Savings: ₹65,696
- ₹50 Lakh Loan | 20-Year Tenure | 8.5% Interest Rate
- Current EMI: ₹43,391
- New EMI at 8.25%: ₹42,603
- Total Interest Now: ₹54,13,879
- Total Interest After Cut: ₹52,24,788
- Savings: ₹1,89,091
- **₹75 Lakh Loan | 25-Year Tenure | 8.5%
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