RBI MPC Meet February 2026: Is Repo Rate Cut Ahead? Know How It Could Impact Your Home Loan EMI Calculations

Home loan borrowers closely track Reserve Bank of India (RBI) policy decisions as changes in the repo rate have a direct impact on loan interest rates and monthly Equated Monthly Instalment (EMI). With the RBI expected to keep the repo rate unchanged at 5.25 percent in the February 2026 policy meeting, borrowers are likely to see stability in home loan EMIs, especially on floating-rate loans linked to external benchmarks.

RBI MPC Meet February 2026: Policy Rate Cut Ahead?

According to a survey by GoodReturns, the RBI is expected to maintain a neutral stance at its February policy meeting, even as benign inflation conditions theoretically provide room for further easing. If the central bank keeps the repo rate unchanged, it will remain at 5.25%.

Why RBI Is Expected to Hold Repo Rate Steady in February 2026

"The Reserve Bank of India's Monetary Policy Committee will maintain the repo rate at 5.25% because they want to avoid risk after their previous 125 basis points rate cuts which started in 2025 and because food prices and rupee value problems continue," said Anurag Goel, Director, Goel Ganga Developments.

How RBI's Repo Rate Policy is Directly Linked With Home Loan Interest Rates

The repo rate is the interest rate at which the RBI lends money to commercial banks to meet short-term liquidity needs. Since banks borrow from the RBI at this rate, any change in the repo rate influences lending rates across the economy, including home loans.

Floating-rate home loans are directly linked to external benchmarks such as the repo rate. When the repo rate falls, banks' borrowing costs reduce, prompting them to lower home loan interest rates. Conversely, when the repo rate rises, EMIs become more expensive. Fixed-rate home loans are indirectly affected, as changes are usually reflected at the time of refinancing.

What a Steady Repo Rate Means for Home Loan EMIs

With the repo rate unchanged at 5.25 percent, home loan interest rates are expected to remain largely stable in the near term. This means borrowers are unlikely to see any immediate reduction in EMIs, but they are also protected from sudden increases.

Stable rates help borrowers plan their finances better, especially first-time homebuyers and those servicing long-tenure loans. For existing borrowers on floating rates, EMIs are likely to remain at current levels unless banks independently adjust spreads or margins.

How Home Loan EMIs Are Calculated; Understand Monthly Instalment Calculation With Formula & Example

Home loan EMIs are calculated using the formula:

EMI Calculation Formula = Principal Loan Amount (P) × Monthly Interest Rate (R) × (1+R)^Monthly Loan Tenure or Time(T) / [(1+R)^T - 1]

For example, a borrower takes a home loan of Rs 10 Lakh (10,00,000) at an annual interest rate of 7.2% for a tenure of 10 years (120 months).

Monthly interest rate (R) = 7.2 ÷ 12 ÷ 100 = 0.006

Loan tenure (N) = 120 months

EMI = 10,00,000 × 0.006 × (1 + 0.006)¹²⁰ / [(1 + 0.006)¹²⁰ - 1]

This results in a monthly EMI of approximately Rs 11,714.

What Home Loan Borrowers Should Do Now

For existing home loan borrowers, the current environment offers predictability rather than immediate savings. Those planning to buy homes can benefit from stable EMIs, while borrowers with older, higher-interest loans may consider refinancing if better spreads are available.

Overall, if the RBI maintains the repo rate at current levels, home loan borrowers can expect stability, improved confidence and sustained affordability, especially as liquidity conditions improve and the real estate sector continues to recover.

"The real estate market expects previous interest rate reductions to help increase affordable housing demand..........Continued stability in borrowing costs will further support first-time homebuyers benefiting from improved loan affordability and manageable EMIs, said Shashank Gupta, Director, RPS Group.

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