RBI MPC April 2025: Repo Rate Cut To 6 Per Cent, Will This Make Your Home Loan Cheaper?

The Reserve Bank of India (RBI) on Wednesday announced that the Monetary Policy Committee (MPC) voted unanimously to cut down key rates by 25 basis points. Governor Sanjay Malhotra said that the repo rate now stands at 6 per cent, against the earlier rate of 6.25 per cent.

This marked the second consecutive rate cut opted by the MPC after it lowered benchmark rates by 25 basis points in its earlier meeting in February 2025.

The panel revealed that the standing deposit facility (SDF) rate and marginal standing facility (MSF) rate now stands at 5.75 per cent and 6.25 per cent respectively. 

To manage inflationary pressures, the Reserve Bank of India uses the Standing Deposit Facility (SDF) — a mechanism through which it offers interest to commercial banks for depositing their excess funds. By doing so, the RBI absorbs surplus liquidity, helping to keep inflation in check.

In contrast, the Marginal Standing Facility (MSF) allows banks to borrow money from the RBI when they're short on funds. The interest rate charged under the MSF serves as a safety net, ensuring that banks can meet their immediate liquidity needs and maintain financial system stability.

Also Read : RBI MPC Projects CPI Inflation At 4% For FY26, Says Governor Sanjay Malhotra

Affordable EMIs

This move from the MPC is expected to lower the borrowing costs for homemakers and ease their concerns. Vimal Nadar, Head of Research, Colliers India, explained that the consecutive cuts in key rates announced by the central bank will help boost the sentiment among home buyers. This will, in turn, lead to an improvement in housing demand in affordable and middle-income segments of society, he added.

Piyush Bothra, Co-Founder and CFO, Square Yards added that the second consecutive rate cut will translate into more affordable EMIs for consumers. This will help make home ownership a reality for individuals during the time of escalating property values. "Moreover, this further strengthens liquidity in the system, enabling developers to secure funding and accelerate new project rollouts. As inflation remains under control, this rate cut could serve as a stabilising force amid broader global uncertainties, reinforcing stakeholder confidence in residential real estate," Bothra noted.

Also Read : RBI MPC Highlights: From Repo Rate Cut To CPI Inflation Projection; Check Details Here

Necessary Boost For Economy

Nadar pointed out that the switch in stance from ‘neutral’ to ‘accommodative’ also indicates a monetary policy which supports growth and this will be more crucial as global markets become increasingly volatile due to the barrage of reciprocal tariffs from the US.

“Although the intensity and impact of ongoing tariff escalations needs to be fully ascertained, RBI remains optimistic on domestic growth outlook and projects the GDP to grow by 6.5 per cent in the fiscal 2025-26. Recent easing of inflation is likely to increase disposable income which in turn has the potential to boost domestic consumption,” he explained.

Amit Goyal, MD, India Sotheby’s International Realty stated that this move was direly needed for the domestic economy as global turmoil poses a challenge. “By ensuring liquidity and keeping borrowing costs attractive, this decision by the central bank, will bolster corporate confidence and investments. For India's housing sector, if the rate cut is passed on as a benefit on home loans, it will support the demand momentum, and help the real estate industry ride over this period of uncertainty,” he commented.

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