Repo Rate projection in 2026: The Reserve Bank of India (RBI) has reduced the repo rate by a total of 1.25 percent this year. Due to reduction in repo rate by RBI, loans became cheaper and the common people got its direct benefit. Due to reduction in repo rate, interest rates on all types of loans including home loan, car loan, personal loan and education loan came down. Due to reduction in loan interest rates, the total liability of customers has declined, due to which their monthly EMI has also reduced. Now a big question arises here whether RBI can cut the repo rate even in 2026, can the loan become even cheaper next year?
RBI cut repo rate by 1.25 percent this year
The Reserve Bank of India reduced the repo rate by 1.25 percent 5 times this year. This year, the Reserve Bank first cut the repo rate by 0.25 percent in February, 0.25 percent in April, 0.50 percent in June and then by 0.25 percent in December. The repo rate which was 6.50 percent in January this year, has now come down to 5.25 percent. Axis MaxLife Insurance says that the inflation rate in 2026 is expected to be equal to or less than the RBI MPC target of 4%, which will leave scope for continuing the growth supporting policy.
Will loans become cheaper in 2026?
According to Axis MaxLife Insurance, after the soft stance of December 2025, the Reserve Bank of India may make another cut in the repo rate by 25 basis points or 0.25 percent in February or April next year. Axis MaxLife Insurance believes that liquidity support through OMOs is expected to continue throughout CY2026. This combination of low policy rates and consistent liquidity should reduce borrowing costs for both personal and corporate borrowers.
What is real estate’s opinion regarding loan interest rates?
Amit Modi, Director, County Group, says that 2026 could prove to be an important year for real estate. The softening of interest rates and reduction in repo rate by RBI has made home loans cheaper than before, which has increased the confidence of buyers. Chairman of Sikka Group, Harvinder Singh Sikka said that even though property prices have increased in the last two years, the interest rates given by RBI have increased the interest of buyers. Decreasing EMIs and stable loan rates have made it clear that real estate continues to be India’s safest and most reliable investment. This trend is expected to continue in 2026 also.
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