The interest burden on home loans and equalized monthly installments (EMIs) will remain unchanged for now as the Reserve Bank of India (RBI) on April 5 kept the repo rate at 6.5 percent for the seventh consecutive time.

Since October 1, 2019, banks have pegged retail floating rate loans to an external benchmark, which in most cases is the repo rate. Thus, any change in the repo rate directly affects the interest rates on these loans.

The wait for rate cuts continues

Existing borrowers will have to contend with higher interest rates for a few more months, after which economists expect inflation to cool to levels within the RBI's comfort zone, paving the way for rate cuts. Inflation continues to remain above the target of 4 percent, RBI Governor Shaktikanta Das said on April 5.

As of 2021 and 2022, market lows were 6.5% and repo rates were 4%, meaning a 2.5% spread in repo rates. Other lenders offer stable financing and low interest rates to save interest rates.

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