RBI holds the repo rate at 5.25% for a third meeting
The Monetary Policy Committee kept its policy rate unchanged in August, leaving home loan EMIs and deposit rates roughly where they are.
Krish Dalal
What this means for you
Nothing changes on your EMI this month. But at 8.5 percent, a ₹50 lakh loan over 20 years costs about ₹43,400 a month and roughly ₹54 lakh in total interest, more than the loan itself. If your lender is charging above 8.75 percent while the repo rate is flat, you are paying a spread you can negotiate or refinance away. That is the action item, not the rate decision.
See it on a ₹50 lakh, 20-year loanOpens with these numbers already filled in. Change any of them to match your own.
The Reserve Bank's Monetary Policy Committee left the repo rate at 5.25 percent at its August meeting, holding the rate steady for a third consecutive review and keeping its stance neutral.
For borrowers, a hold means floating-rate loans linked to an external benchmark stay where they are. Most home loans in India are now priced off the repo rate directly, so the EMI on an existing floating-rate loan should not move because of this decision.
For savers, the same logic runs in reverse. Banks have little reason to raise deposit rates while the policy rate is flat, so the fixed deposit rates on offer today are a reasonable guide to what will be available over the next quarter. Small savings schemes are set separately by the Finance Ministry each quarter and are unaffected by this decision.
The more useful question is not what the rate is, but what your own loan costs at it. A quarter-point difference on a large, long loan is worth more than most people assume, which is why the calculator below is pre-loaded with a typical home loan rather than left generic.
Sources
We cite the original document, never another outlet's write-up of it. If you spot an error, email hello@paisaexpert.com and we will correct it with a dated note.
More money news
Freelancers and small businesses: ITR-3 and ITR-4 are due 31 August
The non-audit deadline for self-employed professionals and anyone on the presumptive scheme is 31 August. After that it is a belated return with a fee.
Credit card interest gets slightly less punishing
Under revised RBI directions, unpaid fees, penalties and taxes can no longer be compounded into your finance charges. It reduces the cost of carrying a balance.