Homebuyers are set to gain meaningful relief after the Reserve Bank of India (RBI) cut the repo rate by 25 basis points to 5.25 percent on December 5, continuing a cumulative 125-basis-point reduction this calendar year. This marks the most aggressive easing cycle since 2020 and is expected to translate into lower EMIs and more affordable home loans. Advertisement

With the repo rate lowered, banks are expected to adjust lending rates downward for floating-rate borrowers—who form the majority of home loan customers. Most home loans issued after October 2019 fall under the External Benchmark Lending Rate (EBLR) system, directly linked to the repo rate. For these borrowers, rate transmission is typically swift: EMIs fall or loan tenures shorten without requiring any action from the borrower

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