Home loan savings and EMI relief
A ₹50 lakh, 20-year home loan previously priced at 8.5% would now see the EMI fall by ₹3,872, while total interest could reduce by approximately ₹9.29 lakh. Borrowers who maintain their EMIs at the previous level can shorten their loan tenure by 42 months, saving over ₹18.32 lakh in total interest, according to BankBazaar estimates.
Kunal Shah, Co-founder of SURE, said the cut “will bring relief for homebuyers, lowering EMIs and reducing total interest outflow.”
He added that realised inflation remains far lower than headline prints, giving the MPC room to support growth if needed.
Transmission and loan types
Santosh Agarwal, CEO of Paisabazaar, noted that the repo rate cut would bring relief to both prospective and existing borrowers, with faster transmission for floating-rate loans linked directly to the repo rate.
Loans tied to MCLR or other internal benchmarks may take longer to reflect the reduction, as banks’ cost of funds determines their internal rates.
Borrowers typically have the option to either reduce their EMI or maintain the same EMI and shorten the loan tenure.
Agarwal added that as banks pass on the benefits to retail borrowers over time, credit demand is expected to strengthen in the coming months. The cut is also likely to boost spending and investment from existing borrowers and improve overall liquidity.
Demand across segments
Market participants expect housing demand to firm up through the December quarter and into early 2026, particularly in mid-income and premium segments where interest rate transmission is most visible.
Praveen Sharma, CEO of REA India (Housing.com), said the rate cut “provides a strong confidence boost for homebuyers” and should support both new launches and property sales.
Anshuman Magazine, Chairman and CEO of CBRE for India and emerging markets, noted that the reduction “is likely to push banks to transmit previous reductions more aggressively,” easing floating-rate EMIs and lifting sentiment in the real estate market.
Developer outlook
Developers see the rate cut as a positive signal for year-end sales.
ANAROCK Chairman Anuj Puri described it as a “sentiment multiplier” for buyers, noting that it offers an affordability cushion amid rising housing prices.
Rajat Khandelwal, Group CEO of Tribeca Developers, said the reduction “provides much-needed relief to homebuyers in premium markets like MMR, NCR and Pune,” while Rohit Kishore, CEO of Hero Realty, emphasised that easier loan access will strengthen buyer confidence and support project execution.
Sudeep Bhatt, Director Strategy, Whiteland Corporation, added, The approach will improve clearance of unsold inventory and streamline project launches, with real estate being a primary driver in India’s economic growth.”
Yateesh Wahaal, Director, M3M India, said, “For developers, the reduction in capital costs provides much-needed headroom for faster project execution, product innovation, and stronger liquidity management.”
Jason Samuel, Director, House Of Swamiraj, further said, “The boost in liquidity is likely to accelerate construction activities and shorten project timelines, benefiting buyers awaiting timely possession.
According to Subhashendra Kumar, CFO, Trehan Iris, lower borrowing costs will enable developers to better plan capital deployment and financing for ongoing and large-scale projects.
“We are optimistic that this supportive monetary stance will further stimulate sustained demand, accelerate sectoral growth, and drive long-term value creation across India’s real estate markets,” Kumar said.
Ramji Subramaniam, Managing Director, Sowparnika Projects, added, “Lower borrowing costs, coupled with recent GST reforms, will create a favourable environment for both buyers and developers. We anticipate renewed demand across mid-segment and aspirational housing, supporting the long-term stability and growth of the sector.”
According to Madhusudhan G, CMD at Sumadhura group, the RBI’s balanced stance on growth and stability sends a signal that the residential sector will remain a key driver of India’s economic momentum in the coming quarters.
Affordable and mid-market housing
The cut is also expected to benefit the affordable and mid-market segments, where high prices had constrained demand.
JLL Chief Economist Samantak Das said the reduction “directly addresses affordability challenges” and could reactivate buyers who had postponed purchases.
He noted that the majority of home loans are linked to external benchmarks, which should allow for quick transmission of lower rates.
Market outlook
With prompt transmission from banks, borrowers could see lower EMIs or shortened tenures, while developers anticipate a steadier, broad-based pickup in housing demand across mid-income, premium metro, and emerging Tier 2 and Tier 3 markets heading into 2026.
The rate cut provides may bring measurable relief for homebuyers and support continued momentum in residential real estate.