Home EMI: Easy way to reduce home EMI and save lakhs, know what should home loan holders do now if repo rate decreases?

If you are thinking of buying a house or have already taken a home loan, then this is good news for you. Last week, the Reserve Bank of India once again cut the repo rate by 0.50% (RBI Repo Rate Cut). This is the third consecutive cut, and so far there has been a total reduction of 1%. Home loan borrowers will get the biggest benefit from this decision because now your EMI can be reduced due to the reduction in interest rates (Home loan interest rates). This can make taking a loan cheaper (Cheapest Home Loans in June 2025) and easier.

But if you do the right planning, then you can save lakhs not only in EMI but also in the total cost of the entire house. Let us know how much savings are going to be made in the EMI of the home loan (Home loan EMI after the RBI rate cut) after the reduction in the repo rate. Let us also know the easy way to save huge on a home loan..

How much will be the savings in EMI if the interest rate is reduced?

Suppose you have taken a home loan for 20 years and the interest rate was 9.5% earlier, which has now become 8.5%.

On a loan of 30 lakhs, there will be a saving of Rs 1,929 in EMI every month and a total saving of Rs 4.63 lakh in interest.

On a loan of 50 lakhs, the EMI will be reduced by Rs 3,215 and a total saving of Rs 7.71 lakh in interest.

On a loan of 75 lakhs, the EMI will be reduced by Rs 4,823 and a saving of Rs 11.58 lakh in interest.

On a loan of Rs 1 crore, the EMI will be reduced by Rs 6,431 every month and a total saving of up to Rs 15.43 lakh.

What should you do now after the repo rate cut?

The full benefit of the repo rate cut will be available only when you make some important decisions. Here's how you should take advantage of the rate cut...

Don't reduce EMI, pay the same old EMI.

After the interest rate is reduced, banks can reduce your EMI. But if you want the home loan to end soon and save on interest, then don't reduce the EMI. Ask the bank to continue taking the old EMI. This will repay your loan soon and save lakhs of rupees in interest.

Reduce the loan tenure.
If your loan is for 20 years, then plan to finish it in 15 years. For this, you can increase the EMI a little. By doing this, the total interest will be less and there will be a significant saving in the cost of the house.

Pre-pay from time to time

Try to repay the loan a little bit every year from your bonus, savings, or extra income. This will finish the principal quickly and the interest will also be less. Now most banks do not charge any pre-payment.

Calculate your EMI and save yourself.
If the loan amounts mentioned above do not match your case, then there is no need to panic. You can easily calculate the difference in EMI and savings yourself. For this, you can use the online home loan EMI calculator of SBI or any bank.

First, you have to enter the old interest rate, loan amount, and tenure. Then enter the same details with the new interest rate. By calculating the difference between the two, you will be able to know how much will be the savings in EMI and total interest.

Keep these things in mind.

The effect of decreasing the repo rate is directly on your EMI and the cost of the house. But this effect will be beneficial only when you take the right decisions. If you adopt strategies like pre-payment and EMI control in the initial years of the loan, then home loan can become a smart financial plan for you, not a burden.

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