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RBI MPC 2025: Panel Slashes Key Rates By 25 Bps, See How This Will Make Home Loans Cheaper
The Reserve Bank of India (RBI) on Friday announced that the Monetary Policy Committee (MPC) has decided to slash key rates by 25 basis points. Sharing the decision, Governor Sanjay Malhotra said that the repo rate now stands at 6.25 per cent, down from the earlier 6.5 per cent. This also means that the standing deposit facility (SDF) rate and marginal standing facility (MSF) rate now stands at 6 per cent and 6.50 per cent respectively. The SDF rate is the interest rate paid by the RBI to commercial banks for depositing their extra funds with the banking regulator. This is a tool used by the central bank to keep a tab on inflation. The MSF rate is the interest rate at which banks can borrow funds from the RBI. It helps banks meet their liquidity requirements and also maintains stability in the banking system. Lower Rates And Borrowing Costs The decision to slash benchmark rates will translate into reduced borrowing costs and potentially help homemakers. Kaushal Agarwal, co-founder and director, The Guardians Real Estate Advisory, explained that this marked the first rate reduction from the central bank in almost five years. “This move is expected to lower borrowing costs, potentially making home loans more affordable and improving buyer sentiment. For developers, it could ease financial pressures and encourage new project launches,” Agarwal noted. He added that the the growth projections, along with a lower inflation estimate of 4.2 per cent for the 2025-26 fiscal year (FY26) indicated a stable economic outlook. The executive added that these factors could lead to a more balanced environment in the real estate sector and support demand across residential and commercial segments. Also Read : RBI MPC 2025: Panel Cuts Growth Forecast For FY25 To 6.4%, Check GDP Estimates For FY26 Here Reduced EMIs For Homebuyers Yashoraj Tyagi, CEO, CASHe, said that this decision is not only going to make things easier for new borrowers, but also lower the burden for existing ones. “This cut is expected to lower equated monthly instalments for home, auto, and personal loans, making credit more affordable for consumers,” Tyagi added. Additionally, lower rates are expected to help premium real estate markets grow further, Rajat Khandelwal, Group CEO, Tribeca Developers stated. The executive pointed out that the RBI’s decision to slash key rates ‘will provide much-needed relief to homebuyers, especially in premium markets like MMR, NCR, and Pune, where rising EMIs have impacted affordability. Lower borrowing costs not only improve financial predictability but also strengthen buyer confidence.’ Also Read : RBI MPC 2025: Panel Expects Food Prices To Reduce, Check CPI Inflation Estimate For FY26 Here Boost For Affordable Housing And Real Estate Sector Vikas Garg, joint MD, Ganga Realty, said that the MPC's key rates decision will help make housing more affordable for all. This will, in turn, lead to more growth for the real estate sector, he argued. "With reduced home loan interest rates, aspiring homeowners will find it easier to invest in their dream homes, boosting demand across segments. This step aligns perfectly with the vision of making housing more affordable and accessible. Additionally, it will provide momentum to the real estate market, encouraging both end-users and investors to take advantage of the lower borrowing costs," Garg explained. Saransh Trehan, MD, Trehan Group, added that the lower rates will boost market sentiment, bringing in both first time buyers and investors. The enhanced liquidity in the market will also strengthen real estate sector's potential for investment. "Lower interest rates on home loans will make homeownership more affordable, empowering buyers with greater purchasing power. This move is expected to enhance market sentiment, encouraging both first-time buyers and investors to take advantage of the reduced borrowing costs. The rate cut will positively impact demand across segments, from affordable to premium housing, leading to increased sales and sectoral growth. Additionally, improved liquidity in the market will further strengthen real estate as a stable investment avenue," Trehan stated.
The Reserve Bank of India (RBI) on Friday announced that the Monetary Policy Committee (MPC) has decided to slash key rates by 25 basis points. Sharing the decision, Governor Sanjay Malhotra said that the repo rate now stands at 6.25 per cent, down from the earlier 6.5 per cent.
This also means that the standing deposit facility (SDF) rate and marginal standing facility (MSF) rate now stands at 6 per cent and 6.50 per cent respectively. The SDF rate is the interest rate paid by the RBI to commercial banks for depositing their extra funds with the banking regulator. This is a tool used by the central bank to keep a tab on inflation.
The MSF rate is the interest rate at which banks can borrow funds from the RBI. It helps banks meet their liquidity requirements and also maintains stability in the banking system.
Lower Rates And Borrowing Costs
The decision to slash benchmark rates will translate into reduced borrowing costs and potentially help homemakers. Kaushal Agarwal, co-founder and director, The Guardians Real Estate Advisory, explained that this marked the first rate reduction from the central bank in almost five years.
“This move is expected to lower borrowing costs, potentially making home loans more affordable and improving buyer sentiment. For developers, it could ease financial pressures and encourage new project launches,” Agarwal noted.
He added that the the growth projections, along with a lower inflation estimate of 4.2 per cent for the 2025-26 fiscal year (FY26) indicated a stable economic outlook. The executive added that these factors could lead to a more balanced environment in the real estate sector and support demand across residential and commercial segments.
Also Read : RBI MPC 2025: Panel Cuts Growth Forecast For FY25 To 6.4%, Check GDP Estimates For FY26 Here
Reduced EMIs For Homebuyers
Yashoraj Tyagi, CEO, CASHe, said that this decision is not only going to make things easier for new borrowers, but also lower the burden for existing ones. “This cut is expected to lower equated monthly instalments for home, auto, and personal loans, making credit more affordable for consumers,” Tyagi added.
Additionally, lower rates are expected to help premium real estate markets grow further, Rajat Khandelwal, Group CEO, Tribeca Developers stated. The executive pointed out that the RBI’s decision to slash key rates ‘will provide much-needed relief to homebuyers, especially in premium markets like MMR, NCR, and Pune, where rising EMIs have impacted affordability. Lower borrowing costs not only improve financial predictability but also strengthen buyer confidence.’
Also Read : RBI MPC 2025: Panel Expects Food Prices To Reduce, Check CPI Inflation Estimate For FY26 Here
Boost For Affordable Housing And Real Estate Sector
Vikas Garg, joint MD, Ganga Realty, said that the MPC's key rates decision will help make housing more affordable for all. This will, in turn, lead to more growth for the real estate sector, he argued. "With reduced home loan interest rates, aspiring homeowners will find it easier to invest in their dream homes, boosting demand across segments. This step aligns perfectly with the vision of making housing more affordable and accessible. Additionally, it will provide momentum to the real estate market, encouraging both end-users and investors to take advantage of the lower borrowing costs," Garg explained.
Saransh Trehan, MD, Trehan Group, added that the lower rates will boost market sentiment, bringing in both first time buyers and investors. The enhanced liquidity in the market will also strengthen real estate sector's potential for investment. "Lower interest rates on home loans will make homeownership more affordable, empowering buyers with greater purchasing power. This move is expected to enhance market sentiment, encouraging both first-time buyers and investors to take advantage of the reduced borrowing costs. The rate cut will positively impact demand across segments, from affordable to premium housing, leading to increased sales and sectoral growth. Additionally, improved liquidity in the market will further strengthen real estate as a stable investment avenue," Trehan stated.
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