How does the repo rate affect my home loan?

Most floating-rate home loans are linked to the repo rate. When the RBI changes it, your loan's interest rate — and EMI or tenure — adjusts accordingly.

Who decides the repo rate?

The RBI's Monetary Policy Committee (MPC) sets the repo rate, usually reviewing it every two months.

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Nifty 5022,520.451.3%Sensex72,472.331.23%Bank Nifty55,256.651.36%

Nifty 5022,520.451.3%H 22,580.75 · L 22,294.75as of 09 Oct, 3:31 PM IST|Sensex72,472.331.23%H 72,669.2 · L 71,739.49as of 09 Oct, 3:32 PM IST|Bank Nifty55,256.651.36%H 55,419.3 · L 54,617.2as of 09 Oct, 3:31 PM IST|USD / INR₹96.730.05%H ₹96.78 · L ₹96.73as of 9:00 AM IST|Gold Intl (10g)₹1,31,124.371.43%H ₹1,31,634.4 · L ₹1,29,252.19as of 10 Oct, 2:29 AM IST|Silver Intl (1kg)₹1,89,855.582.73%H ₹1,91,136.88 · L ₹1,84,885.9as of 10 Oct, 2:29 AM IST|Crude WTI₹8,884.650.39%H ₹8,914.64 · L ₹8,706.67as of 10 Oct, 2:29 AM IST|Bitcoin₹80,06,3500.68%H ₹80,33,645.23 · L ₹79,79,054.77as of 10 Oct, 11:28 AM IST|Ethereum₹2,41,4250.37%H ₹2,41,868.71 · L ₹2,40,981.29as of 10 Oct, 11:28 AM IST|Nifty 5022,520.451.3%H 22,580.75 · L 22,294.75as of 09 Oct, 3:31 PM IST|Sensex72,472.331.23%H 72,669.2 · L 71,739.49as of 09 Oct, 3:32 PM IST|Bank Nifty55,256.651.36%H 55,419.3 · L 54,617.2as of 09 Oct, 3:31 PM IST|USD / INR₹96.730.05%H ₹96.78 · L ₹96.73as of 9:00 AM IST|Gold Intl (10g)₹1,31,124.371.43%H ₹1,31,634.4 · L ₹1,29,252.19as of 10 Oct, 2:29 AM IST|Silver Intl (1kg)₹1,89,855.582.73%H ₹1,91,136.88 · L ₹1,84,885.9as of 10 Oct, 2:29 AM IST|Crude WTI₹8,884.650.39%H ₹8,914.64 · L ₹8,706.67as of 10 Oct, 2:29 AM IST|Bitcoin₹80,06,3500.68%H ₹80,33,645.23 · L ₹79,79,054.77as of 10 Oct, 11:28 AM IST|Ethereum₹2,41,4250.37%H ₹2,41,868.71 · L ₹2,40,981.29as of 10 Oct, 11:28 AM IST|

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Repo Rate

The rate at which the RBI lends to commercial banks.

Definition

The Repo Rate is the interest rate at which the Reserve Bank of India (RBI) lends short-term funds to commercial banks against government securities. It is the RBI's key policy tool to control inflation and liquidity — when the repo rate rises, loans (and EMIs) generally become costlier.

Example

If the RBI cuts the repo rate, banks can borrow cheaper and often pass on lower interest rates on home and car loans, reducing your EMI.

See Repo Rate history

Frequently asked questions

Related terms

Reverse Repo Rate CRR SLR EMI

Browse the full financial glossary. Educational only — not investment advice.