With repo rate on hold, analysts see stability powering homebuying decisions in 2026

In its first monetary policy review of 2026, the Reserve Bank of India’s Monetary Policy Committee (MPC) on Friday kept the benchmark repo rate unchanged at 5.25%, signalling a pause after last year’s easing cycle.

While the decision offers no immediate reduction in borrowing costs, industry experts believe the current phase favours stability over speculation, encouraging homebuyers to recalibrate existing loans and proceed with purchases rather than wait for further rate cuts. 

With lending rates holding steady, analysts say the focus is shifting from expectations of cheaper credit to predictability in long-term financing. This, they argue, could prove equally supportive for housing demand, particularly at a time when economic growth projections remain strong and inflation is under control. 

Also read: RBI MPC keeps repo rate unchanged at 5.25%: Key takeaways from the February meet

No immediate relief, but greater predictability 

Sanjay Dutt, Managing Director and CEO of Tata Realty & Infrastructure Ltd., said the unchanged policy rate provides clarity to both buyers and developers. “The decision to keep the repo rate at 5.25% may not deliver an immediate boost to affordability, but it offers something just as important—predictability,” Dutt said. He noted that after a cumulative 125 basis points correction over the past year, borrowers now have greater confidence to plan long-term commitments. “This status quo reinforces the sense that we are in a steady interest rate regime, allowing homebuyers to map out their financial obligations with confidence,” he added. 

Dutt also pointed to supportive macroeconomic factors, including the Union Budget and the RBI’s upgraded GDP growth forecast of 7.4%, as likely to sustain demand momentum in the residential market. According to him, improved visibility on financing costs could prompt fence-sitters to convert intent into actual purchases, particularly for long-term investments such as housing.  

Policy clarity seen boosting buyer confidence 

Legal and policy experts echoed the view that stability itself can act as a trigger for demand. Heena Chheda, Partner at Economic Laws Practice, said that while EMIs remain unchanged, the elimination of uncertainty plays a crucial role in buyer sentiment. “Keeping the repo rate unchanged doesn’t move EMIs, but it clears uncertainty. With no immediate risk of a rate hike and no need to wait for a cut, buyers gain the confidence to go ahead with purchases,” she said, adding that in a sentiment-driven market, predictability can be as influential as lower interest rates. 

Also read: RBI MPC: Central bank doubles collateral-free loan limit for small business units to ₹20 lakh

The latest decision, announced by RBI Governor Sanjay Malhotra, comes after a series of rate cuts in 2025. Since February last year, the MPC had reduced the repo rate by a cumulative 100 basis points through three consecutive cuts, bringing it down from 6.5% to 5.5% by June, before opting for a pause. One basis point equals one-hundredth of a percentage point. 

Helps sustain housing demand 

Real estate consultants believe the pause will help maintain affordability, especially for first-time buyers. Anshuman Magazine, Chairman and CEO for India, South-East Asia, Middle East and Africa at CBRE, said home loan EMIs are likely to remain stable following the MPC’s decision. “Stable EMIs help preserve affordability and reduce financial uncertainty, which should support sustained interest in residential real estate, particularly from end-users,” he said. 

Magazine added that improving macroeconomic conditions, coupled with low inflation, create a favourable environment for housing uptake in the medium term. Analysts broadly agree that while borrowers may not see immediate EMI relief, the RBI’s decision to hold rates steady strengthens confidence in a predictable interest-rate environment—potentially proving more supportive for housing demand in 2026 than incremental rate cuts.