RBI Repo Rate Cut December 2025: If you also pay EMIs on your car or home loans, there’s good news for you. Your loan EMIs may be reduced in December. In fact, the RBI repo rate may decrease again next month, which will reduce interest rates on all types of loans, including home loans and car loans.
According to a recent report by Morgan Stanley, the RBI may cut interest rates by 25 basis points in December, bringing the repo rate down to 5.25 percent. Suppose a person has a home loan of Rs 10 lakh with a term of 20 years. Previously, the interest rate was 9%, resulting in an EMI of approximately Rs 8,992.
How much will the EMI reduce?
Now, if the RBI cuts interest rates by 25 basis points (0.25%) and the new rate becomes 8.75%, the EMI will drop to approximately Rs 8,850. This means a monthly savings of approximately Rs 142. These savings may seem small, but in the long run, they will result in a total relief of several thousand rupees.
How much will be the savings on a home loan of Rs 50 lakh?
Suppose an individual has taken out a home loan of Rs 50 lakh with a term of 20 years. Previously, the interest rate was 9%, resulting in an EMI of approximately Rs 44,960 per month. Now, if the interest rate is reduced to 8.75%, the EMI will be approximately Rs 44,125 per month. This means a savings of approximately Rs 835 per month.
It should be noted that the RBI cut the repo rate on June 9, 2025, bringing it to 5.50%. There has been no further reduction in the repo rate since then. Currently, the repo rate remains at 5.50%. The RBI last reduced the repo rate on April 9, 2025, from 6.25% to 6%.