For the second time in a row, Reserve Bank of India (RBI) Governor Sanjay Malhotra has announced a cut of 25 basis points, i.e. 0.25%, in the repo rate, the interest rate at which the central bank lends money to commercial banks. This decision was taken after a three-day meeting of the Monetary Policy Committee (MPC), which concluded today.
Earlier in February 2025, the RBI had cut 25 basis points, the partial benefit of which was given by some banks to their customers. Now, with this new cut, home loan rates can go down further if banks pass on this benefit to their consumers.
It was widely expected that the RBI would go for yet another repo rate cut in its April monetary policy review. This latest cut in interest rates can make the EMI of home loans cheaper, but by how much?
How much you can save on your Rs 1 crore home loan if rates come down by 50 bps
If your home loan amount is Rs 1 crore and the tenure is 20 years, and the interest rate is 9%, then your current EMI would be around Rs 89,973.
If the bank passes the full 50 bps cut, the interest rate on your loan will come down to 8.5%. Your new EMI will be around Rs 86,782. That means saving Rs 3,190 every month, about Rs 47,880 in a year, and a relief of more than Rs 7.65 lakh on the entire tenure.
Take a look at the table below to see how much money borrowers can save in EMIs per month and for entire 20-year tenure on various loan amounts:
Original interest: 9%; Revised interest: 8.5%; Tenor 20 yearsAmountOriginal EMIRevised EMIOriginal interestRevised interestEMI SavingsInterest Savings₹ 30,00,000₹ 26,992₹ 26,035₹ 34,78,027₹ 32,48,327₹ 957₹ 2,29,700₹ 40,00,000₹ 35,989₹ 34,713₹ 46,37,369₹ 43,31,103₹ 1,276₹ 3,06,266₹ 50,00,000₹ 44,986₹ 43,391₹ 57,96,711₹ 54,13,879₹ 1,595₹ 3,82,833₹ 60,00,000₹ 53,984₹ 52,069₹ 69,56,054₹ 64,96,655₹ 1,914₹ 4,59,399₹ 70,00,000₹ 62,981₹ 60,748₹ 81,15,396₹ 75,79,430₹ 2,233₹ 5,35,966₹ 80,00,000₹ 71,978₹ 69,426₹ 92,74,738₹ 86,62,206₹ 2,552₹ 6,12,532₹ 1,00,00,000₹ 89,973₹ 86,782₹ 1,15,93,423₹ 1,08,27,758₹ 3,190₹ 7,65,665₹ 1,50,00,000₹ 1,34,959₹ 1,30,173₹ 1,73,90,134₹ 1,62,41,636₹ 4,785₹ 11,48,498Source: Bankbazaar.com
On the latest interest rate cut by the central bank, Samir Jasuja, Founder & CEO, PropEquity, said, “Average housing prices have risen by approximately 50% post-Covid. At this juncture, the two consecutive cuts in repo rate,
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