What RBI’s Decision on Feb 6 to Hold the Repo Rate Means for Home Loan Borrowers

The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.25% following its February 2026 Monetary Policy Committee (MPC) meeting. This comes after a 25-basis-point cut announced in December 2025. 

As a result, repo-linked home loan EMIs are unlikely to change immediately. However, borrowers still have multiple options to manage costs and improve loan efficiency.

Why the RBI Held the Repo Rate?

The central bank’s decision to pause rate cuts reflects a combination of macroeconomic factors. Inflation remains within manageable levels, while returns on small savings schemes and other deposit products continue to be relatively attractive. 

Additionally, the 10-year government bond yield has not declined in line with earlier repo rate cuts and is hovering around 6.65%.

Banks are also facing slower deposit growth, making it difficult to lower lending rates further. In this environment, the RBI opted for stability rather than an immediate rate reduction.

What This Means for Home Loan EMIs?

For borrowers with home loans linked to the Repo Linked Lending Rate (RLLR), EMIs are expected to remain unchanged following the policy pause. These borrowers had already benefited from cumulative rate cuts of 125 basis points during 2025.

Loans linked to older benchmarks such as the Marginal Cost of Funds-based Lending Rate (MCLR), base rate or Benchmark Prime Lending Rate (BPLR) may still be carrying higher interest rates, as transmission under these regimes tends to be slower.

Read More: Budget 2026 Aligns Income-Tax and EPF Rules for Recognised Provident Funds.

Conclusion

The RBI’s decision to hold the repo rate provides stability but does not eliminate opportunities for savings. Borrowers can still lower interest costs through refinancing, switching loan benchmarks or structured prepayments. Reviewing loan terms periodically and aligning repayment strategies with financial goals can help improve long-term affordability even in a stable rate environment.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.