The Reserve Bank of India's Monetary Policy Committee voted 4-2 to hold the repo rate at 6.50% on April 9, 2026. Governor Sanjay Malhotra called it a "pause for clarity" rather than the end of the cycle.
The headline numbers
- Repo rate: 6.50% (unchanged)
- SDF: 6.25%
- MSF: 6.75%
- Cash Reserve Ratio: 4.00%
- FY27 GDP forecast: 6.7%
- FY27 CPI inflation forecast: 4.2%
What it means for your home loan
If your loan is linked to RLLR (Repo-Linked Lending Rate) or EBLR (External Benchmark-Linked Rate), your interest rate stays exactly where it is. No EMI change. No tenure change. No action needed.
For a ₹40 lakh home loan at 8.75% over 20 years, the EMI is ₹35,349. A 25-basis-point cut later this year would drop it to ₹34,706 — a ₹643/month saving, or ₹1.54 lakh over the full tenure.
MCLR-linked borrowers face the same flat outcome at the next reset. MCLR tracks bank cost-of-funds, not the repo directly.
Why a cut is likely August or October
Three things are guiding the MPC:
1. CPI is cooperating. March 2026 CPI came in at 4.1% — close to the 4% target. Food inflation has cooled from the 2024 peak. 2. Monsoon outlook is normal. IMD's first long-range forecast points to 102% of long-period average rainfall. 3. Global rates are easing. The Fed has signalled two cuts in 2026. The ECB has already cut twice this year.
The MPC wants to see two more clean inflation prints before easing. That puts the next cut squarely in the August 6 review or the October 1 review.
What borrowers should do now
Don't switch to fixed unless you're near retirement. Variable home loans typically beat fixed loans over 15-20 year horizons because rates trend down with each cycle. Fixed makes sense only if you have under 5 years remaining and want certainty.
Prepay if you have surplus. Every ₹1 lakh you prepay on a 20-year ₹40 lakh loan saves roughly ₹1.5 lakh in interest. Use bonus money, FD maturities, or PPF withdrawals — not your emergency fund.
Check your spread. Many borrowers from 2022-2023 are paying spreads of 2.5%+ over the repo. New customers today get spreads of 1.7-2.0%. Ask your bank to refresh your spread, or refinance to a competitor.
Don't time the cut. Even if a 25bp cut lands in August, it saves only ₹643/month on a ₹40 lakh loan. Buying a home you can afford today beats waiting six months for a marginal rate drop.
Fixed deposit savers
FD rates remain attractive for one more cycle. SBI's 1-3 year special is at 7.10% for senior citizens. Small finance banks like AU and Equitas offer 8.25%+ on 2-3 year tenures. Lock long now if you expect cuts to resume by Q4.
Bottom line
The pause is temporary. Use this window to review your spread, plan a prepayment, or lock an FD. Run your numbers in our home-loan EMI calculator before any refinancing decision.