Archive · 19 Jun 2025
Home Loan EMI Relief Delayed? Understanding Your Loan Benchmark
The central bank has reduced interest rates, but some homeowners aren't seeing their monthly payments go down.
This is because their loan's interest rate is tied to a specific benchmark.
Loans linked to the repo rate change quickly, while others, like those tied to MCLR, might not reflect the rate cuts immediately.
Borrowers should check their loan terms to see if they can switch to a better rate.
RBI has cut the repo rate by 1% this year.
Home loan rates have fallen below 8% due to the repo rate cuts.
Not all borrowers are seeing lower EMIs, depending on their loan's benchmark.
Repo-linked loans adjust quickly to rate changes, while MCLR loans adjust slower.
Borrowers should review their loan terms to potentially save money.
- Who
- Home loan borrowers, banks, and financial experts.
- What
- Impact of the repo rate cuts on home loan EMIs, highlighting the importance of the loan benchmark.
- When
- The article discusses the effects of rate cuts implemented this year, as of a recent period.
- Where
- Information applies to the home loan market, primarily in India.
- Why
- To explain why some borrowers aren't benefiting from rate cuts and how they can potentially save money.
Borrowers with unfavorable benchmarks
Borrowers with favorable benchmarks
EMI benefits
Borrowers with unfavorable benchmarks
Paying higher EMIs
Borrowers with favorable benchmarks
Benefiting from lower EMIs
- Repo Rate Cut
- 1%
- Repo-linked loans
- Adjust quickly to changes
- MCLR loans
- Adjust slowly
- Base Rate/PLR loans
- Slowest to adjust
- Loans linked to Repo Rate
- 60.4%
- Loans linked to MCLR
- 35.6%
