Will the RBI rate cuts be leading my home loan rates and home loan EMIs lower?

Clearly, the RBI cutting rates by 40 bps after a previous cut of 75 bps in March will surely bring down home loan interest burden. Reduction of repo rates is a signal for banks to borrow funds at lower rates from RBI and pass on the benefits to borrowers. For borrowers who took loans after October 2019 or switched to the external benchmarking regime, this will automatically translate into an equivalent reduction in their home loan interest rates. To illustrate, SBI’s minimum home loan rate will come down from 7.35% to 6.95%. Banks have to reset their rates at least once every quarter so your home loan will surely benefit. It will not only result in reduction of EMI but also in a sharp reduction in overall interest burden over the tenure of the loan.