Impact on monthly home loan EMI
On how this RBI repo rate cut would impact one’s monthly home loan EMI, Annuj Goel, Managing Director at Goel Ganga Developments, said, “While the RBI’s 50 bps repo rate cut has been audacious and visually bold in terms of allowing savings for its lenders, the repo rate N/O is at 5.5%, so home loan borrowers can save from the increase. This is how the product works: if you had a ₹50 lakh loan for 20 years, you could save somewhere in the neighbourhood ₹1,960 off the monthly EMI or just under ₹4.7 lakh over the life of the loan.”
On how much relief a home loan borrower would get if it has taken ₹30 lakh for 20 years, Aman Gupta, Director of RPS Group, said, “Home loan borrowers with a ₹30 lakh loan of 20 years will see a decrease in their EMI of about ₹1,176 per month, and the best part is borrowers then have the choice they can either reduce their EMIs or as being discussed herein, retain their current EMI repayments to reduce the length of tenure and hence earn a greater interest saving.”
On the cumulative benefit that a fresh home loan borrower would be getting after the RBI’s repo rate cut in 2025, Pankaj Mathpal, MD & CEO at Optima Money Managers, said, “The RBI has cut repo rate by 25 bps in February and April also. So 2025, the RBI has curtailed the repo rate by 100 bps (25 + 25 + 50) in 2025, which means those who have delayed their home-buying decisions in recent quarters have a great opportunity to buy their dream home as they would be getting around ₹3,800 to ₹4,000 p0epr month relief in their EMI on a home loan of ₹50 lakh for 20 years.”
Impact on bank FD returns
On how this repo rate cut move would impact bank FD rates, Pankaj Mathpal of Optima Money Managers said, “The repo rate cut is going to affect FD rates negatively as banks would cut FD rates across tenors once they pass on this repo rate cut decision to their customers. So, senior citizens and other bank FD investors are advised to book a bank FD account now, as a change in bank FD rates doesn’t impact old bank FD accounts. If they fail to take this opportunity, they can look at time deposits in the post office small savings schemes.”
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
