Do you know that recent economic changes have influenced the behavioural shift of homebuyers in 2025? Nowadays, whether a first-time buyer or one with multiple properties, is taking an interest in high-class luxury properties with the finest amenities. This inclination of the home buyers in 2025, however, has its close association with the RBI rate cuts. If you are in Mumbai or any other city in India and planning to invest your hard-earned money, the decision of the Reserve Bank of India or RBI to cut repo rates is enabling you to buy your dream home or to buy multiple properties. Such a decision of the RBI has its direct impact on the real estate market, and here in this blog of Srijan Realty, we will shed light on how repo rate cuts improve housing affordability and help buyers from every corner of India. Let’s begin.
How RBI Rate Cuts Improve Housing Affordability: Ushering in A New Dawn For Homebuyers
The first half of 2025 ushered in a new dawn for potential homebuyers in India when the Reserve Bank of India declared their decision to cut a substantial amount of repo rates. Although this decision is all over the country, for home or property buyers, it is an absolutely beneficial one. Besides that, this particular monetary policy of the RBI saw cumulative cuts of 100 basis points in the repo rate since February 2025. As a result, housing affordability has improved, and more home buyers are getting the confidence to invest in diverse properties. For the aspiring homebuyers, it is the most favourable time to opt for loans, as from here they will get loans at a lower interest rate. So, if you are cancelling the plan of buying your home for a long time, just for the sake of financial barriers, it’s going to be a dream-come-true moment for you.
The impact of the lower repo rate is clearly visible in the Affordability Index, which measures the proportion of income an average household needs to fund their monthly home loan EMI. A lower ratio indicates greater affordability.
| Indian Cities | Affordability Ratio |
| Pune | 22% |
| Kolkata | 23% |
| Mumbai | 48% |
| Chennai | 24% |
| Ahmedabad | 18% |
| Bangalore | 20% |
This improvement of the affordability ratio is offering a ray of hope to the homebuyers to get a property at the lowest EMI and to get their own home in the cities they prefer the most. This reduction of repo rates is acting as measurable relief in the most expensive real estate market.
Direct benefits for the Kolkata-based homebuyers
Kolkata has already occupied a significant place as one of the most affordable cities in India. From affordable rented properties to affordable flats and homes, Kolkata has abundant options to offer to its residents or the ones coming to this city with a hope of starting a new life. RBI’s rate cuts have solidified this position of the city of joy and presented huge benefits for the property buyers. Have a look at the pointers below to find out.
- Low EMIs and High Affordability
For the average salaried residents of Kolkata, the 23% affordability ratio is making Kolkata one of the most accessible cities where the residents can buy properties and housing options at the cheapest rate. The lower repo rate refers to the low EMI burden for both the new and existing borrowers.
- Boost to the mid to premium property segments
Kolkata’s real estate growth in the present scenario is focusing on areas like EM Bypass, Rajarhat and so on. These locations in the heart of Kolkata are offering multiple luxury and mid-level residential projects that can be purchased via home loans. RBI rate cuts in such a scenario are playing a pivotal role and opening up the floodgates of affordable luxury.
- Improved investor confidence
The lower borrowing cost is boosting the confidence of the local and NRI investors that their investment will be safeguarded by a stable borrowing cost. Besides, this lowest financial barrier is encouraging the new entrants or the first-time home buyers to explore mid to premium affordable homes in the prime locations.
Closing Lines
RBI rate cuts in the present day have not only minimised the interest rate, but also taken part in boosting the financial confidence among the end users. For a secure and long-term investment in property, 2025 is going to be the best year. To get more insights on home affordability and others, check out the website of Srijan Realty, the leading residential developer in Kolkata.
FAQs
- Did the RBI rate cuts affect all homebuyers equally?
Yes, the RBI rate cut will offer benefits to all kinds of borrowers who are going to opt for home loans.
- Which specific segment of the Kolkata real estate market will benefit from the RBI’s decision?
Lower EMI rate will help the mid-income and affordable luxury segments to get high-value properties in the prime locations of Kolkata.
- How does the rate cut affect my home loan eligibility for a new loan?
A lower interest rate generally increases our loan eligibility amount. Low EMI will free up more income and will enable the banks to sanction a high amount of loans.
