RBI Keeps Repo Rate Unchanged: Should You Buy Your Home Now?

The RBI has kept its repo rate unchanged at 6.5 per cent for the ninth consecutive time. This comes as relief to home loan borrowers, but they cannot benefit from lower interest rates, at least now. 

“The unchanged repo rate and potential rate cuts in upcoming monetary policy committee (MPC) meetings are positive signs for home loan borrowers, making it an opportune time for them to make home-buying decisions and for existing borrowers to repay their loans and reduce their burden,” says Adhil Shetty, CEO, BankBazaar, a fintech portal. 

However, we may expect a rate cut going ahead. “Although the repo rate has remained constant for some time, the possibility of a rate change by the central bank in the next six to twelve months cannot be ruled out,” says Atul Monga, CEO and Co-Founder, Basic Home loan. 

The RBI's decision to keep repo rates unchanged sets a positive tone for the housing industry. “Maintaining interest rates offers consistency in borrowing costs, which will prompt more aspiring homebuyers to consider taking the plunge - and thus drive demand in the housing market. With interest rates staying steady, EMIs will remain manageable for current and potential homeowners, potentially leading to increased home sales - particularly in the price-sensitive affordable segment,” says Anuj Puri, Chairman - ANAROCK Group, a real estate services company. 

As per ANAROCK Research, there were total housing sales of nearly 2.51 lakh units across the top 7 cities in H1 2024 - the highest half-yearly sales in the last decade. Meanwhile, average residential prices across the top seven cities have seen a significant jump in the last one year – ranging between 13-39 per cent in Q2 2024 when compared to Q2 2023. 

Should You Buy Now?  

“There has been continuous expectation from loan borrowers for a rate cut, especially from those seeking big-ticket loans like home loans. However, we believe home buyers should not wait for a rate cut to make a purchase decision. Property prices are rising, and if a prospective buyer finds a property that fits their preference and budget, they should proceed with the purchase instead of waiting for ideal conditions,” says Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution, a loan distributor. 

Moreover, home loans are typically long-term commitments, often spanning 20 years or more. Any future rate cuts will help in reducing the applicable interest rate over the loan period. “Therefore, our suggestion to home buyers is that even though home loan interest rates are expected to come down in the next few monetary policy reviews, you can still proceed with your home buying plans now with the assistance of a home loan. This approach ensures you secure your desired property without further price increases while still benefiting from potential future rate cuts,” says Kapoor.