If you have a home loan, there’s a good chance you’ll be watching the Reserve Bank of India’s policy meeting this week a little more closely than usual.
After months of rising living costs and uncertainty around interest rates, many borrowers are wondering whether their monthly EMIs could go up again. The ‘s Monetary Policy Committee (MPC) will meet from June 3 to June 5, and while inflation remains under control for now, rising energy prices, pressure on the rupee and concerns over food inflation are keeping policymakers cautious.
The big question is: Will the RBI raise interest rates, keep them unchanged, or offer some relief to borrowers?
At the moment, the consensus appears to be that the RBI is unlikely to change interest rates immediately.
Umesh Sharma, CIO-Debt, The Wealth Company Mutual Fund, believes the central bank will stay cautious. “We expect the MPC to maintain the current policy rate at this meeting, refraining from immediate action.”
This suggests that borrowers may not see any immediate increase in their home loan EMIs after the June policy announcement.
Although retail inflation remains relatively moderate, policymakers are keeping a close eye on several risks.
Higher global energy prices can eventually make transportation and manufacturing more expensive. There are also concerns that weather-related disruptions, including El Nio conditions, could affect food prices in the coming months.
At the same time, economic growth has shown some signs of slowing, creating a difficult balancing act for the central bank.
For prospective homebuyers, a stable interest rate environment could provide some relief after years of elevated borrowing costs.
Kunal Rishi, Chief Operating Officer, Krisumi Corporation, said lower borrowing costs remain important for the housing market.
“For the housing sector, lower borrowing costs are critical to sustaining homebuyer demand and enhancing affordability. A supportive rate environment would encourage home purchases, strengthen consumer confidence, and provide a positive impetus to the real estate sector, which has strong linkages with the broader economy.”
However, experts believe any significant reduction in home loan rates may still be some distance away.
According to Anurag Goel, Director, Goel Ganga Developments, borrowers should not expect immediate relief on their EMIs.
“Any near-term relief on home loan EMIs, frankly, looks hard to come by. Retail inflation has climbed to 3.48% in April, that’s the sixth monthly uptick in a row, and the RBI is likely to keep the repo rate steady because they want to manage risks.”
He added that while affordable housing is facing challenges and housing credit growth has slowed, the current environment does not point towards an imminent rate-cut cycle.
In simple terms, borrowers may avoid an EMI increase for now, but they may also have to wait longer for any meaningful reduction in loan repayments.
Developers say the impact of higher borrowing costs continues to be felt across the real estate industry.
Vijay Raundal, Managing Director, Teerth Realties, believes a stable repo rate alone may not solve the sector’s problems.
“Even if the repo rate stays put, the high cost of capital is still squeezing builders. Housing loan growth has slowed significantly, which points to transmission not really working. A broad-based rate decision alone will not fix the deeper issues already facing the sector.”
According to industry players, financing costs remain elevated for both developers and homebuyers, affecting project execution and housing demand.
While some market participants hope for rate cuts in the future, experts believe the RBI may continue prioritising financial stability.
Akash Pharande, Managing Director, Pharande Spaces, said inflation and growth trends currently do not support aggressive easing.
“A 25 basis point cut feels off the table for June, so policy may stay neutral but with a hawkish undertone. Developers should assume this will be a long stretch of higher interest rates. The next real easing move, if any, will likely arrive only in the last quarter of 2026.”
Menawhile, the good news for home loan borrowers is that most experts do not expect the RBI to raise interest rates during its June policy meeting. That means your EMI is unlikely to increase immediately.
The less encouraging news is that meaningful relief through lower EMIs may also take time. For now, the RBI appears focused on controlling inflation risks while keeping a close watch on economic growth.
For homeowners and prospective buyers, that means preparing for a period of relatively stable, but still elevated borrowing costs.