There's some good news for home loan borrowers. The Reserve Bank of India (RBI) on Friday announced a 25 basis point cut in the repo rate, bringing it down to 5.25%. The decision came after a three-day meeting of the Monetary Policy Committee (MPC), and RBI Governor Sanjay Malhotra said the panel was "unanimous" in its call.

"The MPC voted unanimously to reduce the policy repo rate by 25 basis points to 5.25% with immediate effect," Malhotra said while announcing the outcome.

For millions of borrowers, this naturally raises one big question:

So, Will Your EMI Reduce or Stay The Same?

The answer depends on the type of loan you have.

If your home loan is repo-linked (EBLR): Good news!

Your EMI will likely come down.

Most new home loans today are tied to the External Benchmark-Linked Lending Rate (EBLR), which directly tracks the repo rate. When the RBI cuts the rate, banks are expected to pass on the benefit fairly quickly.

If your loan is under base rate or MCLR: No immediate change

Borrowers under older systems, Base Rate or MCLR, may not see instant relief. These rates move slower and are not directly linked to the repo rate.

If you fall in this category, you may consider switching to a repo-linked loan to get faster benefits.

RBI's 2025 Rate Cut Journey So Far

This is the fourth repo rate cut this year. Here's a quick recap:

• February 7: From 6.50% - 6.25%
• April 9: From 6.25% - 6.00%
• June 6: From 6.00% - 5.50%

After that, the RBI paused in August and October as global uncertainties, including US tariff actions, kept the central bank cautious.

How The Rate Cut Affects Homebuyers and Real Estate

For current homeowners, this move means lower interest outgo and a lighter EMI burden.

For those planning to buy, this may be the nudge they needed.

Real estate experts say the timing couldn't be better.

Manju Yagnik, Senior Vice President, NAREDCO Maharashtra, said:

"A 25 basis point rate cut at this stage will meaningfully support homebuyer sentiment and improve affordability across categories. With inflation stabilising and demand staying strong, this is a constructive signal for both buyers and developers."

The real estate market, which has been juggling high input costs and rising material prices, could also see renewed momentum.

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