Repo Rate 2025: A golden opportunity for homebuyers, further Rate Cuts possible

The Reserve Bank of India may further cut the repo rate in December, which will make loans and EMIs cheaper. This can prove to be a big relief for people planning to buy a house.

New Delhi: If you have been planning to buy a house for a long time, then there is relief news for you. The Reserve Bank of India (RBI) may make another cut in the repo rate in the coming time, which may further reduce the interest rates of the loan. This will also make the EMI of the home loan cheaper, reports Dynamite News correspondent.

Disclosure in HSBC report

According to a report by HSBC Global Research, the repo rate can be brought down to 5.25 percent by December 2025. The report said that no change will be made at the moment in the Monetary Policy Committee (MPC) meetings to be held in August and October. But in the December meeting, RBI can cut another 25 basis points, which is believed to be the last cut of this cycle.

Relief in inflation became the reason

The report states that the reduction in inflation in recent months has strengthened this possibility. In June 2025, the Consumer Price Index (CPI)-based inflation came down to 2.1 percent, from 2.8 percent in May. Inflation has been relieved due to the fall in prices of food items in particular. The report also estimates that the average inflation rate in the second quarter of 2025 may be around 2.7 percent, which is lower than the Reserve Bank's estimate of 2.9 percent.

Statement of RBI Governor Sanjay Malhotra

RBI Governor Sanjay Malhotra said in an interview that the decision to change the repo rate will depend on two major things—inflation rate and economic growth. He said that both the conditions of reduction in inflation and sluggish growth rate are in favor of reduction in interest rates.

How much reduction has been done so far?

Since the beginning of 2025, RBI has cut the repo rate thrice. After cuts of 0.25-0.25 basis points in February and April, a big cut of 0.50 basis points was made in June, bringing down the repo rate from 6.50% to 5.50%. Now if there is a cut in December as well, then it can come down to 5.25%.

Home buyers will get benefits

The cut in repo rate has a direct impact on borrowing schemes like home loans and auto loans. Due to the reduction in interest rate, EMI decreases and the purchasing power of people increases. In such a situation, buying a house can become more affordable.