Buying a home in India is still considered the biggest dream of ordinary families. Consequently, even a slight change in interest rates significantly impacts people’s budgets. In February 2026, the Reserve Bank of India decided to keep the repo rate unchanged at 5.25 percent during its monetary policy review. This decision comes at a time when inflation remains under control, and the economy is growing at a steady pace.
Impact of the RBI’s decision
By keeping the repo rate stable, the central bank has indicated that a balance is currently being struck between growth and inflation. The policy committee took this decision unanimously and maintained a neutral policy stance. This indicates that the RBI will take appropriate action in the future.
The absence of a change in the repo rate directly impacts those with floating-rate loans. In such cases, the likelihood of a sudden increase in EMI is low. This provides relief to existing loan holders and allows new buyers to better plan their budgets.
Inflation and Growth
According to the latest estimates, the economic growth rate for FY 2026 is estimated at around 7.4 percent, while inflation is expected to remain around 2.1 percent. This indicates that the country’s economy is in a balanced state.
How are home loan interest rates determined?
Most banks in India link their home loans to repo-linked or external benchmark rates. The interest rate depends on the customer’s credit score, income, job position, and loan amount. Customers with better credit scores typically receive lower interest rates.
Which banks offer cheaper home loans?
It should be noted that home loan interest rates are lower at public sector banks than at private banks.
Bank of Baroda (BoB): Starting from 7.10%
Bank of India (BoI): Starting from 7.15%
State Bank of India (SBI): Starting from 7.25%
Union Bank of India: Starting from 7.25%
Punjab National Bank (PNB): Starting from 7.30%
Private banks like HDFC offer home loans at interest rates between 7.20% and 7.90%. Bajaj Housing Finance and Canara Bank also offer interest rates as low as 7.15%.
In recent years, several major banks have linked home loan rates to the repo-based system. For example, SBI’s home loan rates have been seen to hover around 7.5% in some cases, although this varies depending on the customer profile.
With interest rates stabilizing, many banks are offering discounts and offers on processing fees. This may make it easier for first-time homebuyers to secure a loan.
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Rohit P
My name is Rohit Pal, and I have been working in the field of journalism for the past five years. During this time, I have written on a variety of topics, including business, automobiles, technology, and politics. I have worked with several major organizations and am currently working with Timesbull.
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