RBI- Will home loan EMI be reduced in October? Know what indication RBI has given

EMI- Big news for common people of India. The Reserve Bank of India (RBI) has decided to keep the repo rate stable in the Monetary Policy Committee (MPC) meeting on 6 August 2025. That is, there has been no reduction in home loan interest rates right now.

Nevertheless, experts say that there is still scope for a reduction in the repo rate in the coming months. Home loan borrowers had got a lot of relief in the last few months. RBI had cut the repo rate by a total of 100 basis points, i.e. 1%, in the meetings of February, April and June. This resulted in a significant saving in EMI of many home loan holders.

Will home loans become cheaper?

People are asking whether home loan interest rates can be reduced further. The answer to this depends on many things, especially retail inflation. Inflation rate fell to 2.1% in June 2025, which is the lowest in the last one year. RBI’s decisions are based on this inflation rate. When inflation remains low, the scope of reducing interest rates increases.

But RBI will not just go by the current figures, it will also see what the trend of inflation is in the future. VK Vijaykumar, Chief Investment Strategist, Geojit Investments, says, inflation can remain under control due to good monsoon and good condition of Kharif crop. In such a situation, MPC may get a chance to cut the repo rate again.

What signals are coming from the market?

The 10-year government bond yield was 6.843% in January, which fell to 6.16% by May. Right now it is hovering around 6.3%. That is, the market does not expect a major cut in interest rates in the near future. However, the effect of the 100 basis point cut till June has not yet fully reached the banks.

Experts say that the effect of a gradual reduction in interest rates will be seen in the coming months as well. Andromeda Sales & Distribution co-CEO Raul Kapoor says, we feel that the series of interest rate cuts is not over yet. If the economic situation remains good, more relief can be provided in the upcoming MPC meetings.

Real estate experts expect the RBI to cut interest rates again in October. Amit Prakash Singh, co-founder of Square Yards, says, if there is another cut before the festive season, it will boost buying and enthusiasm in the market. According to an SBI report, a total of 100 basis points can be cut in the entire financial year 2025-26. A cut of 25 bps has already been made in April and 50 bps in June, meaning another cut of 25 bps is expected in the next few months.