RBI MPC Meet October 2025: Repo Rate Likely to Stay at 5.50%; How Could It Impact Your Home Loan EMI & Tenure?

The Reserve Bank of India (RBI) has commenced its three-day Monetary Policy Committee (MPC) meeting, which began on September 29 and will conclude on Wednesday, October 1, 2025. The six-member committee, chaired by RBI Governor Sanjay Malhotra, will announce its policy decisions-including the key repo rate-at a press conference scheduled for October 1.

RBI MPC Meeting October 2025: Repo Rate Likely to Be Held at 5.50%

According to a recent Goodreturns poll, a majority of economists expect the RBI to maintain the current repo rate at 5.50%. Out of 30 economists polled, 17 forecast no change, while 13 expect a rate cut-mostly in the range of 25 basis points (bps).

A few even predict a sharper cut of 25 to 50 basis points, though such a move is considered less likely. The expectation of a pause is largely driven by global economic uncertainty, particularly concerns over potential growth risks stemming from U.S. tariffs and other geopolitical pressures.

A report from SBI Research noted that a 25 basis point rate cut could be the most balanced choice at this time, especially with inflation showing signs of easing. The report also highlighted that the recent rationalisation of Goods and Services Tax (GST) rates may further help bring inflation down by 65 to 75 basis points in the coming months.

How RBI Repo Rate Cut Will Impact Home Loans?

The outcome of this meeting holds significant implications for borrowers, especially those with home loans. The repo rate-the rate at which the RBI lends money to commercial banks-directly influences lending rates across the economy.

When the RBI raises the repo rate, it becomes more expensive for banks to borrow money, and they typically pass this cost onto consumers by increasing interest rates on loans. This results in higher Equated Monthly Instalments (EMIs) for homebuyers, making home ownership more costly and affecting household budgets.

On the other hand, when the repo rate is reduced, banks are able to borrow at a lower cost and, in turn, offer more attractive lending rates to consumers. This leads to lower EMIs and more affordable loan terms, which can stimulate demand in the real estate market.

RBI Repo Rate Changes: How To Calculate Home Loan EMI?

As of August 2025, RBI has set the repo rate at 5.50%, following a 50 basis point cut from 6.00%. Understanding how a change-or no change-in the repo rate impacts your home loan EMI (Equated Monthly Instalment) is crucial for both prospective and current borrowers.

Scenario 1: EMI If RBI Keeps Repo Rate Unchanged at 5.50%

If the Reserve Bank of India decides to keep the repo rate unchanged at 5.50%, banks are likely to maintain their existing lending rates. In such a scenario, home loan interest rates may remain around 8.50% per annum expectedly.

For instance, if a borrower takes a home loan of Rs 50 lakh for a tenure of 20 years (240 months) at this rate, the applicable monthly interest rate would be 0.708%. Using the standard EMI formula, the monthly EMI would be approximately Rs 43,391. This means the borrower's repayment obligations remain the same unless interest rates change in the future.

Scenario 2: EMI If RBI Cuts Repo Rate by 25 bps to 5.25%

If the RBI reduces the repo rate by 25 basis points, bringing it down to 5.25%, banks may lower their lending rates slightly, possibly to around 8.25% per annum. Under the same loan conditions, a loan of Rs 50 lakh over 20 years-the new monthly interest rate would be 0.6875%.

In this case, the EMI would come down to approximately Rs 42,684, resulting in a monthly saving of Rs 707. Over the entire loan tenure, this would amount to total savings of more than Rs 1.7 lakh.

"We do not expect a rate cut in this policy, given that forward one-year CPI inflation is projected closer to 5 percent, we believe the central bank will adopt a more dovish stance. The key concern remains transmission: despite 100 basis points of rate cuts, liquidity infusion of Rs 5.5 lakh crore via OMOs, and a CRR cut of Rs 2.5 lakh crore, borrowing costs remain elevated, especially for central and state governments," said, Murthy Nagarajan, Head of Fixed Income, Tata Asset Management.

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