If you’re planning to buy a home, there’s some good news for you. Home loan EMIs may soon become more affordable. According to a report released on Tuesday, the Reserve Bank of India (RBI) is likely to cut the repo rate again in the coming months. The report suggests that the Monetary Policy Committee (MPC) may reduce the repo rate by 25 basis points in its December 2025 meeting, bringing it down to 5.25% by the end of the year.
No Rate Change Expected in August and October
The report by HSBC Global Research forecasts that the RBI is unlikely to make any changes in the upcoming August and October MPC meetings. However, it is expected that a final 25 basis point cut will be made in December. This would bring the repo rate to 5.25% by the end of 2025.
Inflation Drops in June
Inflation, measured by the Consumer Price Index (CPI), fell from 2.8% in May to 2.1% in June, mainly due to falling prices of food and essential items. Further decline is also expected. The report estimates that the average inflation rate in Q2 of 2025 will remain at 2.7%, which is lower than the RBI’s forecast of 2.9%.
Also Read: Home Loan EMI Calculator: A Tool for Monthly Payment Plan
RBI Governor Sanjay Malhotra Speaks Out
In an interview with CNBC TV18 on Tuesday, RBI Governor Sanjay Malhotra stated that both declining inflation and slowing economic growth could justify another repo rate cut. He said that future decisions on repo rate will depend on inflation trends and economic performance.
Earlier this year, the RBI cut the repo rate by 0.25 basis points in both February and April, bringing it down to 6.00%. In June, it further cut the rate by 0.50 basis points, reducing it to 5.50%.