In its second monetary policy review for the current financial year, the Reserve Bank of India’s Monetary Policy Committee (MPC) has reduced the repo rate by 50 basis points, bringing it down from 6% to 5.5%. This marks the third consecutive rate cut by the central bank since February 2025. The decision, announced by RBI Governor Sanjay Malhotra on June 6, comes amid a backdrop of easing inflation and is aimed at boosting economic growth. Alongside the rate cut, the RBI also shifted its policy stance from ‘accommodative’ to ‘neutral’, signaling a more balanced approach to managing growth and inflation.
The cumulative rate reductions since February have led to a noticeable drop in borrowing costs for consumers and businesses. Most banks have already adjusted their external benchmark lending rates and marginal cost-based lending rates (MCLR), which translates to lower EMIs for loans. The move is supported by the latest inflation data, which shows retail inflation declining to 3.16% in April, comfortably below the RBI’s 4% target. This provided room for a bolder cut, with analysts noting that while a 25-bps reduction was widely expected, the RBI opted for a more aggressive 50-bps move to further stimulate demand.
Governor Malhotra emphasised the positive momentum in the Indian economy, stating, “Indian economy growing at a very fast pace, we are making all efforts to grow even faster in our vision of Viksit Bharat.” The rate cut is expected to reinforce this growth trajectory by encouraging consumption and investment. It also sends a signal of confidence to domestic and global investors amid broader global economic uncertainties. The RBI’s next moves will be closely watched, as policymakers continue balancing growth objectives with maintaining price stability.
Industry Experts Opinion
Mr. Dharmendra Raichura, VP & Head of Finance at Ashar Group
“The RBI’s anticipated 50 bps repo rate cut, bringing it down from 6.00% to 5.5%, is a positive development for the real estate sector. For homebuyers, it translates to lower home loan interest rates, making homeownership more affordable and accessible. This is especially encouraging for first-time buyers and those looking to upgrade. For developers, improved buyer sentiment is likely to boost demand, allowing them to offer more attractive financing options and launch new projects with greater confidence. Overall, the rate cut sets the stage for a more vibrant market, benefiting both homebuyers and developers alike.”
Sunny Bijlani, Joint Managing Director – Supreme Universal
“The RBI’s decision to cut the repo rate by 50 basis points to 5.5% in June 2025 offers timely support for homebuyers navigating a high-cost housing market. With borrowing rates expected to ease, the reduction brings much-needed relief for those looking to invest or upgrade, making EMIs more affordable and long-term ownership more attainable. For aspiring homeowners, especially in the premium segment, it opens doors to spacious, thoughtfully designed residences. On the developer side, it creates momentum to enhance offerings through superior quality, timely delivery, and lifestyle-focused amenities. This move boosts buyer confidence and reinforces the industry’s commitment to delivering future-ready homes that meet evolving urban aspirations.”
Ms. Manju Yagnik, Vice Chairperson of Nahar Group and Senior VP, NAREDCO, Maharashtra
‘The RBI’s decision to reduce the repo rate by 50 basis points is a strong and timely intervention, especially amid early signs of demand moderation in the residential sector. It also indicates the central bank’s confidence in macroeconomic stability and pursuit of growth. Lowering the repo rate to 5.5% will have a cascading effect across the lending ecosystem, bringing home loan interest rates well below 7.75%—a highly encouraging development for both existing and prospective homebuyers.
This rate cut is poised to create a significant improvement in affordability, especially for first-time purchase, this will help revive interest in mid-income and premium housing segments. For developers, available cheaper credit will ease liquidity constraints, accelerate project implementation, and improve delivery timelines. This will, in turn, provide much needed cash flow to absorb the unsold inventory while generating fresh buyer interest that is good for the real estate value chain as a whole, thus enabling the growth of this sector and the broader economic revival by dint of its linkages with more than 200 allied industries.”
Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd.
“The twin reduction of the repo rate by 50 basis points to 5.50% and cash reserve ratio by 100 basis points to 3% respectively by the RBI provides significant relief for homebuyers across the country. This bold move by the apex bank comes at a crucial time when inflation is easing, and the economy requires strong stimulus to sustain growth. Lower borrowing costs will make home loans more affordable, thereby encouraging more buyers to enter the market. The reduction in CRR is expected to infuse significant liquidity in the banking system, which will prompt banks to lend even more.
The demand for mid and premium segment homes has already been on the rise following previous rate cuts, and this larger reduction will further accelerate interest from both homebuyers and investors. Additionally, the positive market sentiment around the possibility of further rate cuts this financial year bodes well for the real estate sector, paving the way for sustained growth and renewed confidence in the housing market.”
Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation
“The Reserve Bank of India’s decision to cut the repo rate by 50 basis points, along with a 100 basis points reduction in the Cash Reserve Ratio (CRR) to 3 percent, is a strong and timely measure to support the real estate sector and other industries. With today’s policy changes, interest rates have now fallen by 100 basis points from last year’s level.
We welcome this decision with open arms, as a reduced repo rate translates to lower borrowing costs, while the CRR cut will enhance liquidity in the banking system. Together, these steps will encourage homebuyers to make property investment decisions. Moving forward, this move will have a ripple effect on demand in the coming months across different segments of homes, ultimately contributing to sustained growth and increased confidence in the real estate market.”
Mr. Jash Panchamia, Executive Director, Jaypee Infratech Limited
“The RBI’s decision to slash the repo rate by 50 basis points and the CRR by 100 bps is clearly aimed at fueling consumption and accelerating investment, especially with inflation remaining within the central bank’s comfort zone. With today’s MPC outcome, the repo rate now stands at 5.50%, marking a cumulative reduction of 100 basis points over three sequential rate cuts. This move paves the way for commercial banks to lower their lending rates, making credit more affordable and further boosting demand for real estate.
With several scheduled commercial banks already offering home loans below 8 percent, today’s decision may lead to a broader transmission of lower rates across the lending ecosystem. This will not only ease the financial burden on borrowers but also enhance affordability across housing segments, offering significant relief to homebuyers and providing a timely push for those planning property purchases.”
Ms. Kanika Singh, Chief Risk Officer – IMGC
“RBI has cut the repo rate by 50 bps to 5.50% given the continuing downward inflation trend, which is well below the 4% tolerance level. RepoRate is now at its lowest level in nearly 3 years. Furthermore, to support growth and stimulate the credit cycle in a challenging geopolitical and economic environment, the central bank could consider additional rate cuts during the year. With the repo rate reduction, Home Loan borrowers are definitely expected to benefit. We have already seen some return on investment (ROI) benefits from the previous two rate cuts being passed on to borrowers. With a 50 bps rate cut, the home loan EMIs will come down substantially, provided the transmission occurs in real-time and not with a lag. While global economic outlook continues to remain volatile due to trade policy uncertainty, India’s growth projections remain positive, supported by strong domestic fundamentals aided by the government and, to some extent, private capex. The inflation outlook is also positive, supported by low core inflation and the expectation of a good harvest.”
Mr. Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited
“The RBI’s decision to cut the repo rate by 50 basis points—the third cut this calendar year, following two earlier cuts of 25 basis points each—reflects a clear push towards supporting credit growth and economic activity. For both existing and new borrowers, this cumulative 100 basis point reduction will provide significant relief in terms of reduced interest burden. Additionally, the move is expected to inject more liquidity into the system, further stimulating economic momentum.
We believe this will have a positive impact on the real estate sector, particularly the mid- and high-end segments, as interest rates become more affordable, reduced EMI and loan eligibility improves.”
Mr. Sunil Sisodiya, Chairman and CEO of Neworld Developers
“The RBI’s decision to reduce the repo rate by 50 basis points is a timely boost for developers launching projects in high-demand, lifestyle-driven markets such as Goa. Lower interest rates not only ease the cost of capital for construction and expansion but also positively influence end-user demand, especially for holiday residences, which are often discretionary purchases. In Goa, where we’re seeing rising interest from metro-based investors and NRIs, the improved affordability on home loans can help convert interest into actual bookings. This rate cut gives developers greater confidence to invest in quality, design-forward projects that align with the aspirations of today’s buyers.”
Mr. Siraj Saiyed, Director, Arete Group
“Commercial and industrial real estate will benefit from the RBI’s 50 basis point rate cut and CRR reduction, which indicate a firm push for expansion and liquidity infusion. Project viability will be increased, and capital deployment across asset classes will be accelerated, by reduced borrowing costs and better credit availability. This policy change will further improve investor sentiment and occupier demand in Gujarat, where the development of industrial corridors and the expansion of logistics are already gaining momentum. This is a chance to expedite the development of infrastructure that will satisfy the changing demands of manufacturing and warehousing while yielding robust, risk-adjusted returns.”
Vishal Raheja, Founder & Managing Director of InvestoXpert.com
“The Reserve Bank of India’s decision to cut the repo rate by 50 basis points to 5.5% is a timely and positive step that will significantly benefit the real estate sector. At a time when the industry is striving to regain momentum post-pandemic and amid global economic uncertainties, this move is expected to improve overall market sentiment. Lower borrowing costs will ease the financial burden on developers, enabling faster project execution and improved cash flow. More importantly, it will make home loans more affordable, encouraging fence-sitters to take purchase decisions and thereby boosting housing demand, especially in the affordable and mid-income segments. We believe this reduction, coupled with supportive policies and ease of credit, can pave the way for a more robust and sustained recovery in the coming quarters.”
Mr. B.K. Malagi, Vice Chairman, Experion Developers
“For aspiring homeowners, this translates directly into tangible savings on their monthly EMIs. With home loan interest rates potentially falling below the 8% mark — from the current range of 8.00% to 9.00% across major banks — affordability improves significantly. This is particularly impactful for first-time buyers and those in the mid-income and affordable housing segments. The increased purchasing power will undoubtedly reignite consumer confidence.
From the perspective of real estate developers, the benefits are profound. Lower borrowing costs will not only alleviate financial stress but also free up capital, enabling faster project execution and completion. This is vital for encouraging the launch of new developments to meet rising demand. The cut also signals the RBI’s clear focus on fostering economic growth amidst global uncertainties. We anticipate this move, coupled with the healthy long-term growth projections for India’s real estate market — expected to reach $1 trillion by 2030 — will lead to a more robust, liquid, and vibrant real estate ecosystem, propelling sales volumes across key urban markets and supporting a more equitable growth trajectory.”
Mr. Shrinivas Rao, FRICS, CEO, Vestian
“As expected, RBI lowered the repo rate amid global growth slowdown to boost domestic consumption. This is the third rate cut since the start of the year, as headline inflation has softened and is below the target range of 4%. Since February 2025, the RBI has cut the repo rate by 100 basis points (currently standing at 5.5%) with no headroom left for further rate cuts. Hence, the central bank has changed its stance from ‘Accommodative’ to ‘Neutral’ to carefully observe the global scenario and act accordingly. Major commercial banks are expected to pass on this benefit to homebuyers and developers by lowering interest rates, stimulating real estate demand and investments.
Mr. Annuj Goel, Chairman, Goel Ganga Developments
“While the RBI’s 50 bps cut has been audacious and visually bold in terms of allowing savings for its lenders, the repo rate is now at 5.5%, so home loan borrowers can clearly save from the increase. This is how the product works: if you had a ₹50 lakh loan for 20 years, you could save somewhere in the neighbourhood of ₹1,960 off the monthly EMI or just under ₹4.7 lakh over the life of the loan. The corresponding change for its aggression is showing inflation under 4% for three months. So most will expect the interest rate cuts to draw in demand for homes and growth for the broader economy.
The market transmission of the cut could take months, as we know some lenders are quicker on the reaction. For example, public sector banks like Canara Bank and UCO Bank cut theirs first to 7.75%, while some private banks have not yet cut their rates, so the benefit is also not present cleanly in all banks’ rates. For clients with floating rate loans, there will be automatic changes to EMIs, so at least over the next three months you will receive some timely financial relief in terms of your overall cost of living.”
Mr. Aman Gupta, Director, RPS Group
“While the RBI’s 50 bps cut will have an immediate impact on EMI reduction, it is also opening doors of opportunity for homeowners to strategically reposition themselves. Borrowers with a ₹30 lakh loan over 20 years will see a decrease in their EMI of about ₹1,176 per month. The best part is that borrowers then have the choice: they can either reduce their EMIs or retain their current EMI repayments to reduce the loan tenure and hence earn greater interest savings.
Both the State Bank of India and Punjab National Bank passed on rate cuts of only 25 bps since April, and 36% of loans are adjusted based on four-month-old MCLR values. For those considering refinancing with other banks, it should also be considered whether de-linking your variable rate loan from MCLR will automatically provide future benefits from repo rate shifts. With the RBI now signalling a neutral stance, it is unlikely PMI will increase anytime soon; conversely, shifting monsoon patterns may impact inflation going forward and limit windows for refinancing or transferring loan balances.”
Mr. Keshav Mangla, GM Business Development, Forteasia Realty
“This important rate cut performs a dual role: allowing households to free up some spending power as well as stimulating the real estate markets. A borrower with a ₹1 crore loan will see a reduction in their EMIs of about ₹3,920. The additional ₹21,000 per year will likely be used in discretionary spending.
Industry experts forecast that buyers will return in droves to key areas like Noida and Mumbai, where real estate values were well above affordability for most. Fixed-rate borrowers will not benefit from the cut, and there are no tax benefits on home loans under the new tax regime. Borrowers with credit scores of 750 or more should negotiate better terms or consider pre-payments. For example, putting ₹5 lakh in pre-payment after five years on a ₹50 lakh loan would force lenders to bear ₹11 lakh in interest. There is room for more cuts in 25-50 bps increments—an important step toward making housing finance more accessible.”
Mr. LC Mittal, Director, Motia Builders Group
“The RBI’s 50 bps rate cut provides relief but requires a longer-term view. A ₹75 lakh home loan could see an EMI reduction of ₹2,940 per month, but borrowers must think of this as a short-term opportunity in an uncertain interest rate cycle. An aggressive rate cut often accompanies increased inflation expectations. A future reversal could erase a strong half-year’s worth of cuts.
Banks also have discretion in transmitting monetary policy changes. MCLR-linked loans (almost 40% of bank loan portfolios) will lag behind the new 5.5% repo rate, so traditional borrowers will benefit from policy action sooner than most. Fixed-rate borrowers will not see any benefit unless they incur switching costs. If you can make good use of EMI cash-flow savings by accelerating repayments, a 20-year home loan could have principal repayments reduced by three years, with estimated interest savings of ₹14 lakh. In the meantime, negotiate aggressively with lenders. Even a 0.25% reduction in rates can result in compound total savings of ₹5.2 lakh. This cut will help revive housing demand, though disciplined financial decision-making remains key.”
Mr. Anurag Goel, Director, Goel Ganga Developments
“Due to the RBI holding the repo rate steady, it suggests interest rates will remain unchanged in the medium term. Fixed Deposit investors should make the most of current rates—especially with longer-term FDs—before any downward revisions. Spreading deposits across various banks, including small finance banks that offer slightly better rates, will ensure maximum gains with limited risk.”
Mr. LC Mittal, Director, Motia Builders Group
“What makes sense right now is adopting an FD laddering strategy—placing money in different maturities across various timeframes. This increases liquidity while allowing funds to be reinvested at higher rates in the future. Investors should also account for returns adjusted for inflation and income tax when structuring fixed-income investments within their portfolio.”
Mr. Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara
“The Reserve Bank of India has changed its monetary policy stance to neutral to focus on trade and consumer confidence, aiming to return inflation to its 4% target without letting it spiral out of control. The move includes a 50 bps repo rate cut and earlier 25 bps cuts in February and April. We believe repo rate cuts could be further front-loaded this year, with another 100 bps reduction possible to move money and credit more freely. Banks must fully understand and implement these cuts to stimulate the economy effectively.”
Ms. Asma Javed, Head – Leasing, Navraj Group
“For the first time since COVID-19 wreaked havoc on global economies, the RBI has made three consecutive repo rate cuts, signalling a decisive shift toward growth resurgence. Governor Sanjay Malhotra kept the FY26 GDP forecast at a solid 6.5%, showing the RBI’s confidence in India’s economic strength. Additionally, the inflation target was downgraded to 3.7%, aided by expectations of a good monsoon. The RBI’s dual approach of aggressively cutting rates while keeping growth expectations intact enables the government to encourage more investment while maintaining price stability. The current cycle of rate cuts began in 2023 to help India emerge from the post-COVID recovery phase without overheating the economy.”
Mr. Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara
“A decline in interest rates reduces returns on Indian debt instruments like bonds and fixed deposits, making them less attractive to foreign institutional investors. Conversely, countries offering higher interest rates become more appealing. This often results in capital outflows—investors withdrawing funds from Indian markets. Such outflows cause volatility in equity and debt markets and reduce overall liquidity in Indian markets.”
Mr. Aman Gupta, Director, RPS Group
“When withdrawing funds from India, foreign institutional investors first sell rupee-denominated assets, converting the currency into euros or dollars. This increases demand for foreign currency and causes a relative depreciation of the rupee. A declining rupee makes foreign goods more expensive, adding inflationary pressures and widening the current account deficit. This often forces further policy interventions to curb currency decline.”
Ms. Chanchal Agarwal, CIO, Equirus Credence Family Office
“In a bold policy shift, the RBI delivered a surprise 50 bps repo rate cut and announced a 100 bps CRR cut in four tranches, injecting ~₹2.5 lakh crore liquidity into the system. This marks a cumulative 100 bps easing in CY2025, following earlier 25 bps cuts each in February and April. Coupled with a record ₹2.69 lakh crore dividend and ₹9.5 lakh crore in durable liquidity injections since January, the RBI is aggressively stimulating growth via both monetary and fiscal levers.
Notably, the MPC shifted its stance from ‘Accommodative’ to ‘Neutral,’ signalling that the front-loaded easing cycle may have peaked. The move aims to support growth amid declining inflation projections and weak private capex, but it also underscores constrained room for further cuts in the near term. While positive for credit growth and capex revival, the move could compress banking NIMs near-term. On yields, the front-end may ease further, steepening the curve as excess liquidity compresses short-term rates. We see merit in extending duration to 4–5 years, up from 2–3 years earlier, as ‘risk premium’ pricing re-emerges in the bond market.”
Mr. B.K. Malagi, Vice Chairman, Experion Developers
“For aspiring homeowners, this translates directly into tangible savings on their monthly EMIs. With home loan interest rates potentially falling below the 8% mark — from the current range of 8.00% to 9.00% across major banks — affordability improves significantly. This is particularly impactful for first-time buyers and those in the mid-income and affordable housing segments. The increased purchasing power will undoubtedly reignite consumer confidence.
From the perspective of real estate developers, the benefits are profound. Lower borrowing costs will not only alleviate financial stress but also free up capital, enabling faster project execution and completion. This is vital for encouraging the launch of new developments to meet rising demand. The cut also signals the RBI’s clear focus on fostering economic growth amidst global uncertainties. We anticipate this move, coupled with the healthy long-term growth projections for India’s real estate market — expected to reach $1 trillion by 2030 — will lead to a more robust, liquid, and vibrant real estate ecosystem, propelling sales volumes across key urban markets and supporting a more equitable growth trajectory.”
Mr. Mohit Goel, Managing Director, Omaxe Ltd
“The RBI’s bold 50 basis point rate cut, along with the 100 bps CRR reduction, sends a strong signal of pro-growth intent at a time when inflation remains under control. For the real estate sector, this is a double win—lower home loan rates will improve affordability for buyers, especially in the mid-income and affordable segment, while developers benefit from reduced capital costs. This move has the potential to accelerate demand in all segments of the market. It is a timely, strategic intervention that supports both economic momentum and housing-led growth.”
Ms. Amrita Gupta, Director, Manglam Group
“The RBI’s decisive 50-basis-point rate cut marks a timely and encouraging move for the real estate sector. As borrowing becomes more affordable, we anticipate a meaningful boost in housing demand—particularly among first-time buyers and end-users in Tier 2 and 3 cities, where cost sensitivity plays a key role in decision-making. With inflation easing and liquidity support through the CRR cut, this policy stance reinforces confidence in India’s economic trajectory. We see it as a catalyst that can energise residential sales and strengthen long-term investor interest in real estate.”
Mr. Aditya Kushwaha, CEO and Director, Axis Ecorp
“The RBI’s decision to slash the repo rate and infuse liquidity into the system is a welcome step, especially at a time when global headwinds persist. Lower borrowing costs will ease financing for both homebuyers and developers, unlocking demand in the real estate sector. For players like us focused on lifestyle and second-home markets, this move supports long-term capital planning while making premium properties more accessible. It also sends a strong signal of confidence, reinforcing the momentum for domestic investment and economic revival. Additionally, it strengthens the case for NRI investors looking to capitalise on India’s stable and high-yielding property market.”
Kalyan Chakrabarti, CEO, Emaar India
“We welcome the RBI’s decision to reduce the repo rate by 50 basis points, bringing it down to 5.5%. This policy shift will support both homebuyers and developers, enabling a better environment for ongoing project execution through improved capital access. Additionally, the CRR cut and asset reforms will further enhance liquidity access, fostering robust growth in the real estate industry. The reduced home loan rates will also be beneficial for first-time home buyers, resulting in stronger demand for affordable housing.”
Mr. Alok Raman, Consultant-PR, Emami Realty
“The RBI’s third consecutive repo rate cut of 50 basis points is a decisive and growth-oriented move at a critical juncture. By easing borrowing costs, this policy action directly supports housing affordability and is poised to energize demand particularly in the mid-income and affordable housing segments. For the real estate sector, this translates to renewed buyer confidence and a more buoyant investment environment. The upwardly revised GDP growth projection of 6.5% is a clear signal of India’s economic resilience and recovery momentum. RBI has demonstrated a strategic blend of foresight and pragmatism, aligning monetary policy with the broader vision of sustainable and inclusive growth.”
Image source- telegraphindia.com
