What is the story about?
The Reserve Bank of India (RBI) on Friday (June 5) kept the repo rate unchanged at 5.25%, maintaining a neutral stance amid rising inflation risks and global uncertainty. While the policy decision brings no fresh relief for borrowers, it ensures that home loan EMIs remain stable, even as earlier rate cuts continue to support housing affordability.
According to Adhil Shetty, CEO of BankBazaar, the RBI’s decision reflects a cautious balance between growth and inflation, with previous rate cuts still transmitting through the system.
He noted that while inflation risks have risen due to higher fuel and commodity prices, the impact on housing demand so far remains contained.
Shetty highlighted that cumulative rate cuts in the past year have already improved affordability for homebuyers.
For instance, a ₹50 lakh home loan over 20 years saw a reduction in effective borrowing cost from 8.5% to 7.25%, leading to an estimated EMI savings of around ₹3,873 per month and a total interest saving of nearly ₹9.3 lakh over the tenure, according to BankBazaar estimates.
He added that for existing and new borrowers, the immediate impact of the RBI’s pause is stability.
“Existing borrowers will not see any change in EMIs, while the benefit of earlier cuts continues to flow through,” Shetty said.
Market participants said this stability is also supporting buyer sentiment in the housing market.
A steady interest rate environment allows prospective homebuyers to plan purchases with more certainty, especially in the mid-income and affordable housing segments, where EMIs play a decisive role in purchase decisions.
Anuj Puri, Chairman of ANAROCK Group, said stable borrowing costs help sustain housing demand even as developers face higher construction costs.
He added that consistent home loan rates provide clarity to both buyers and sellers at a time when affordability remains a key driver of residential sales.
Developers also said unchanged rates help maintain momentum in end-user demand, especially as earlier rate cuts have already improved loan eligibility and repayment capacity for many households.
For the real estate sector, the sentiment remains broadly positive.
“Stable borrowing costs help sustain buyer sentiment and support decision-making for both homebuyers and investors. A steady interest rate environment will help maintain this momentum in the months ahead,” said Mohit Goel, Managing Director, Omaxe.
Echoing the view on policy stability, Amrita Gupta, Director, Manglam Group, said the RBI’s decision “provides continuity and stability at a time when global economic conditions remain dynamic.”
She added that a steady rate environment supports long-term planning and keeps homeownership accessible while allowing developers to focus on “thoughtful planning, quality development and sustainable growth.”
We expect this growth momentum to continue and are confident that today’s announcement will help maintain it.", said
Harsh Jagwani, Managing Director, Notandas Realty, said, "Given the current scenario, the RBI’s neutral stance will play a key role in observing the changes in the market in the coming months. We expect this stance to be maintained until the end of the monsoon season as well."
According to Adhil Shetty, CEO of BankBazaar, the RBI’s decision reflects a cautious balance between growth and inflation, with previous rate cuts still transmitting through the system.
He noted that while inflation risks have risen due to higher fuel and commodity prices, the impact on housing demand so far remains contained.
Shetty highlighted that cumulative rate cuts in the past year have already improved affordability for homebuyers.
For instance, a ₹50 lakh home loan over 20 years saw a reduction in effective borrowing cost from 8.5% to 7.25%, leading to an estimated EMI savings of around ₹3,873 per month and a total interest saving of nearly ₹9.3 lakh over the tenure, according to BankBazaar estimates.
He added that for existing and new borrowers, the immediate impact of the RBI’s pause is stability.
“Existing borrowers will not see any change in EMIs, while the benefit of earlier cuts continues to flow through,” Shetty said.
Market participants said this stability is also supporting buyer sentiment in the housing market.
A steady interest rate environment allows prospective homebuyers to plan purchases with more certainty, especially in the mid-income and affordable housing segments, where EMIs play a decisive role in purchase decisions.
Anuj Puri, Chairman of ANAROCK Group, said stable borrowing costs help sustain housing demand even as developers face higher construction costs.
He added that consistent home loan rates provide clarity to both buyers and sellers at a time when affordability remains a key driver of residential sales.
Developers also said unchanged rates help maintain momentum in end-user demand, especially as earlier rate cuts have already improved loan eligibility and repayment capacity for many households.
For the real estate sector, the sentiment remains broadly positive.
“Stable borrowing costs help sustain buyer sentiment and support decision-making for both homebuyers and investors. A steady interest rate environment will help maintain this momentum in the months ahead,” said Mohit Goel, Managing Director, Omaxe.
Echoing the view on policy stability, Amrita Gupta, Director, Manglam Group, said the RBI’s decision “provides continuity and stability at a time when global economic conditions remain dynamic.”
She added that a steady rate environment supports long-term planning and keeps homeownership accessible while allowing developers to focus on “thoughtful planning, quality development and sustainable growth.”
We expect this growth momentum to continue and are confident that today’s announcement will help maintain it.", said
Harsh Jagwani, Managing Director, Notandas Realty, said, "Given the current scenario, the RBI’s neutral stance will play a key role in observing the changes in the market in the coming months. We expect this stance to be maintained until the end of the monsoon season as well."
