RBI Keeps Repo Rate Unchanged: What Homebuyers Must Know Before Buying a ₹1 Crore Home
If you’ve been waiting for the “right time” to buy a house, the RBI’s latest decision may feel like a green signal. The Reserve Bank of India has kept the repo rate unchanged at 5.25%, meaning home loan interest rates are likely to remain stable, at least for now.
And for many aspiring homeowners, this stability brings relief. Because when you’re planning a ₹1 crore home purchase, even a small interest rate movement can change your monthly budget, lifestyle comfort, and long-term financial security.
But here’s the reality: a stable repo rate does not automatically mean it’s the best time to borrow big. What it does mean is that homebuyers should use this pause wisely, by planning smartly, borrowing carefully, and preparing for possible future rate hikes.
Let’s break down what this repo rate decision really means for anyone planning to buy a ₹1 crore home.
A Real-Life Example: The “Affordable EMI” Trap
Neha Kumari, a 34-year-old HR professional from Hyderabad, recently booked a ₹1 crore apartment. She paid a 25% down payment and financed the remaining amount through a home loan.
On paper, her EMI fits comfortably within her monthly income. However, her monthly budget has become tighter, leaving very little room for discretionary spending like travel, shopping, or even additional investments.
She has kept a small emergency fund aside and intends to restart her SIPs after her moving, furnishing, and interior expenses settle down.
Neha’s situation reflects what many Indian homebuyers experience:
- The EMI seems manageable initially
- But lifestyle flexibility reduces drastically
- And future interest rate hikes can worsen cash flow stress
With RBI holding rates steady, she feels temporarily secure, but she knows this comfort may not last forever.
What RBI’s Repo Rate Decision Means for Homebuyers
Since the repo rate remains unchanged at 5.25%, home loans linked to external benchmarks like the repo rate are expected to remain stable.
This means:
- No immediate jump in EMIs
- No sudden increase in loan rates
- Buyers may feel more confident about taking a loan now
However, the bigger question is:
Should you evaluate affordability only at today’s interest rates?
Absolutely not.
A home loan is a 15–25 year commitment. Interest rates move in cycles, and what feels manageable today may become stressful later.
So instead of assuming rates will stay low forever, buyers should plan based on a “rate shock” scenario.
Don’t Look at the ₹1 Crore Price Tag, Look at the Total Cost
One of the biggest mistakes homebuyers make is thinking:
“The home is ₹1 crore, so I just need ₹1 crore worth of planning.”
In reality, buying a home comes with many hidden and unavoidable costs.
A ₹1 crore ready-to-move home can actually cost you much more due to:
- Brokerage charges (1–2%)
- Interior & furnishing expenses (₹10–20 lakh easily)
- Maintenance deposits
- Registration & stamp duty
- Society charges
- Modular kitchen, wardrobes, appliances
- Moving and setup expenses
So even if the home price is ₹1 crore, your real outflow may feel closer to ₹1.15–₹1.30 crore depending on lifestyle choices.
Before Buying, Do This Verification Checklist
A home is not just an emotional decision; it’s also a legal and financial asset. So verification is non-negotiable.
According to Madhupam Krishna (SEBI Registered Investment Advisor and Chief Planner, WealthWisher Financial Planner and Advisors), buyers should verify:
Key documents you must check:
- Title deed chain for 30+ years
- Encumbrance certificate (to ensure no loan/liens exist)
- Occupancy certificate
- Completion certificate
- All municipal and building approvals
- RERA registration details
- Builder track record and past delivery history
Skipping these checks can turn your dream home into a long-term legal nightmare.
Location Still Matters More Than Luxury
Many buyers assume buying a luxury home guarantees appreciation. But that’s not always true.
Experts recommend prioritizing locations that have:
- Metro connectivity
- Upcoming infrastructure projects
- Business hubs nearby
- Strong rental demand
- Low supply of similar homes
Homes in growth zones can see 10–15% annual appreciation in strong cycles, while oversupplied areas may give weak returns.
Also, luxury properties often come with one major downside:
Luxury homes can be harder to sell later
High-ticket homes have fewer buyers, making resale slower and sometimes requiring a price cut.
How Much Should You Really Borrow for a ₹1 Crore Home?
A popular financial planning thumb rule suggests:
Home loan should ideally cover only 50–60% of the property value
Meaning, for a ₹1 crore home, the loan should be around:
₹50–₹60 lakh
However, as Raoul Kapoor (Co-CEO, Andromeda Sales and Distribution) explains, banks often offer loans of:
- 80–90% of property value, depending on borrower eligibility
This is where buyers get tempted to take the maximum possible loan.
But just because a bank is ready to lend doesn’t mean it’s wise to borrow that much.
The Practical Reality: Most Buyers Can Only Pay 20–25% Down Payment
In real life, especially for first-time buyers, arranging 40–50% down payment is difficult.
Most buyers manage only:
- 20–25% down payment
- Remaining amount is financed via home loan
So buyers often end up taking a loan of:
- ₹75–₹80 lakh for a ₹1 crore home
This can still be okay, but only if your income can comfortably support the EMI without sacrificing long-term financial goals.
EMI Planning: What Income Do You Need for a ₹1 Crore Home?
Let’s take a realistic example.
If you take a home loan of ₹80 lakh, tenure 20 years, interest rate around 7.5%, the EMI becomes approximately:
- EMI at 7.5% = ₹64,500/month
Now, experts suggest your EMI should ideally not exceed:
- 40% of your take-home income
So to comfortably afford ₹64,500 EMI, your minimum in-hand salary should be around:
Minimum monthly take-home income: ₹1.6 lakh
Now here’s the real problem:
If interest rates rise slightly, your affordability changes quickly.
What Happens If Home Loan Rates Increase?
At 8% interest, the EMI for the same loan rises to around:
EMI at 8% = ₹66,800–₹67,000/month
This pushes the required take-home salary closer to:
Required income: ₹1.7 lakh/month
That may not sound huge, but over time, these increases add pressure on your monthly budget.
Why You Must Build a “Rate Cushion” Before Borrowing
Shubham Gupta (CFA and Co-founder of Growthvine Capital) warns that buyers should not calculate affordability only at today’s rates.
Because home loans are long-term, and rate changes are inevitable.
Example: ₹80 lakh loan, 20 years
- At 7.5% → EMI ≈ ₹64,500
- If rates rise by 1% (8.5%) → EMI ≈ ₹69,000
- If rates rise by 2% (9.5%) → EMI ≈ ₹74,500
That means:
- ₹4,500 extra per month if rates rise by 1%
- Nearly ₹10,000 extra per month if rates rise by 2%
And annually, that extra burden becomes:
Additional outflow: ₹1 lakh+ per year
That is money you could have invested, saved, or used for family goals.
Don’t Let Your Home Loan Kill Your Wealth-Building
Prashant Mishra (Founder & CEO, Agnam Advisors) sums it up perfectly:
“Your finances should stay comfortable even if interest rates go up by 1–2%. Buying a home should not force you to stop your main investments or damage your long-term goals.”
And this is where many homebuyers make a costly mistake.
They buy the house, pay the EMI, and then stop:
- SIPs
- retirement investments
- children education planning
- emergency savings
They become “house-rich but cash-poor.”
That’s not financial success. That’s financial stress in disguise.
Tax Benefits: Useful, But Don’t Depend on Them Too Much
A home loan does offer tax benefits, but only under the old tax regime.
Key deductions available:
- Section 24(b): Interest deduction up to ₹2 lakh/year (self-occupied home)
- Section 80C: Principal repayment deduction up to ₹1.5 lakh/year
These benefits help reduce taxable income, but they should not be the main reason you take a large loan.
Also, if you’re selling mutual funds or equities to arrange a down payment, consult a tax expert because capital gains tax may apply.
Emergency Fund: Your Biggest Protection Against EMI Stress
Before buying a ₹1 crore home, you should maintain:
Emergency fund of at least 6–12 months of expenses
Because life doesn’t pause after you buy a home.
Unexpected expenses can include:
- medical emergencies
- job changes
- maternity planning
- home repairs
- school admissions
- parental support
Without an emergency fund, even one unexpected situation can push you into credit card debt or personal loans, making the home loan burden even heavier.
Final Thoughts: Repo Rate Stability Is Comfort, Not a Guarantee
Yes, RBI keeping the repo rate unchanged is good news. It provides short-term EMI stability and boosts buyer confidence.
But smart homebuyers know this:
Repo rate stability is temporary. Your loan is permanent.
So before buying a ₹1 crore home, you must:
- Calculate the total ownership cost
- Avoid borrowing at maximum eligibility
- plan EMI affordability with a 1–2% rate hike cushion
- keep investments running
- maintain an emergency fund
- Verify property documents thoroughly
A home should bring peace and pride, not financial anxiety.
If planned correctly, buying a ₹1 crore home can be one of the best decisions of your life.
RBI Keeps Repo Rate Unchanged: What Homebuyers Must Know Before Buying a ₹1 Crore Home
If you’ve been waiting for the “right time” to buy a house, the RBI’s latest decision may feel like a green signal. The Reserve Bank of India has kept the repo rate unchanged at 5.25%, meaning home loan interest rates are likely to remain stable, at least for now.
And for many aspiring homeowners, this stability brings relief. Because when you’re planning a ₹1 crore home purchase, even a small interest rate movement can change your monthly budget, lifestyle comfort, and long-term financial security.
But here’s the reality: a stable repo rate does not automatically mean it’s the best time to borrow big. What it does mean is that homebuyers should use this pause wisely, by planning smartly, borrowing carefully, and preparing for possible future rate hikes.
Let’s break down what this repo rate decision really means for anyone planning to buy a ₹1 crore home.
A Real-Life Example: The “Affordable EMI” Trap
Neha Kumari, a 34-year-old HR professional from Hyderabad, recently booked a ₹1 crore apartment. She paid a 25% down payment and financed the remaining amount through a home loan.
On paper, her EMI fits comfortably within her monthly income. However, her monthly budget has become tighter, leaving very little room for discretionary spending like travel, shopping, or even additional investments.
She has kept a small emergency fund aside and intends to restart her SIPs after her moving, furnishing, and interior expenses settle down.
Neha’s situation reflects what many Indian homebuyers experience:
- The EMI seems manageable initially
- But lifestyle flexibility reduces drastically
- And future interest rate hikes can worsen cash flow stress
With RBI holding rates steady, she feels temporarily secure, but she knows this comfort may not last forever.
What RBI’s Repo Rate Decision Means for Homebuyers
Since the repo rate remains unchanged at 5.25%, home loans linked to external benchmarks like the repo rate are expected to remain stable.
This means:
- No immediate jump in EMIs
- No sudden increase in loan rates
- Buyers may feel more confident about taking a loan now
However, the bigger question is:
Should you evaluate affordability only at today’s interest rates?
Absolutely not.
A home loan is a 15–25 year commitment. Interest rates move in cycles, and what feels manageable today may become stressful later.
So instead of assuming rates will stay low forever, buyers should plan based on a “rate shock” scenario.
Don’t Look at the ₹1 Crore Price Tag, Look at the Total Cost
One of the biggest mistakes homebuyers make is thinking:
“The home is ₹1 crore, so I just need ₹1 crore worth of planning.”
In reality, buying a home comes with many hidden and unavoidable costs.
A ₹1 crore ready-to-move home can actually cost you much more due to:
- Brokerage charges (1–2%)
- Interior & furnishing expenses (₹10–20 lakh easily)
- Maintenance deposits
- Registration & stamp duty
- Society charges
- Modular kitchen, wardrobes, appliances
- Moving and setup expenses
So even if the home price is ₹1 crore, your real outflow may feel closer to ₹1.15–₹1.30 crore depending on lifestyle choices.
Before Buying, Do This Verification Checklist
A home is not just an emotional decision; it’s also a legal and financial asset. So verification is non-negotiable.
According to Madhupam Krishna (SEBI Registered Investment Advisor and Chief Planner, WealthWisher Financial Planner and Advisors), buyers should verify:
Key documents you must check:
- Title deed chain for 30+ years
- Encumbrance certificate (to ensure no loan/liens exist)
- Occupancy certificate
- Completion certificate
- All municipal and building approvals
- RERA registration details
- Builder track record and past delivery history
Skipping these checks can turn your dream home into a long-term legal nightmare.
Location Still Matters More Than Luxury
Many buyers assume buying a luxury home guarantees appreciation. But that’s not always true.
Experts recommend prioritizing locations that have:
- Metro connectivity
- Upcoming infrastructure projects
- Business hubs nearby
- Strong rental demand
- Low supply of similar homes
Homes in growth zones can see 10–15% annual appreciation in strong cycles, while oversupplied areas may give weak returns.
Also, luxury properties often come with one major downside:
Luxury homes can be harder to sell later
High-ticket homes have fewer buyers, making resale slower and sometimes requiring a price cut.
How Much Should You Really Borrow for a ₹1 Crore Home?
A popular financial planning thumb rule suggests:
Home loan should ideally cover only 50–60% of the property value
Meaning, for a ₹1 crore home, the loan should be around:
₹50–₹60 lakh
However, as Raoul Kapoor (Co-CEO, Andromeda Sales and Distribution) explains, banks often offer loans of:
- 80–90% of property value, depending on borrower eligibility
This is where buyers get tempted to take the maximum possible loan.
But just because a bank is ready to lend doesn’t mean it’s wise to borrow that much.
The Practical Reality: Most Buyers Can Only Pay 20–25% Down Payment
In real life, especially for first-time buyers, arranging 40–50% down payment is difficult.
Most buyers manage only:
- 20–25% down payment
- Remaining amount is financed via home loan
So buyers often end up taking a loan of:
- ₹75–₹80 lakh for a ₹1 crore home
This can still be okay, but only if your income can comfortably support the EMI without sacrificing long-term financial goals.
EMI Planning: What Income Do You Need for a ₹1 Crore Home?
Let’s take a realistic example.
If you take a home loan of ₹80 lakh, tenure 20 years, interest rate around 7.5%, the EMI becomes approximately:
- EMI at 7.5% = ₹64,500/month
Now, experts suggest your EMI should ideally not exceed:
- 40% of your take-home income
So to comfortably afford ₹64,500 EMI, your minimum in-hand salary should be around:
Minimum monthly take-home income: ₹1.6 lakh
Now here’s the real problem:
If interest rates rise slightly, your affordability changes quickly.
What Happens If Home Loan Rates Increase?
At 8% interest, the EMI for the same loan rises to around:
EMI at 8% = ₹66,800–₹67,000/month
This pushes the required take-home salary closer to:
Required income: ₹1.7 lakh/month
That may not sound huge, but over time, these increases add pressure on your monthly budget.
Why You Must Build a “Rate Cushion” Before Borrowing
Shubham Gupta (CFA and Co-founder of Growthvine Capital) warns that buyers should not calculate affordability only at today’s rates.
Because home loans are long-term, and rate changes are inevitable.
Example: ₹80 lakh loan, 20 years
- At 7.5% → EMI ≈ ₹64,500
- If rates rise by 1% (8.5%) → EMI ≈ ₹69,000
- If rates rise by 2% (9.5%) → EMI ≈ ₹74,500
That means:
- ₹4,500 extra per month if rates rise by 1%
- Nearly ₹10,000 extra per month if rates rise by 2%
And annually, that extra burden becomes:
Additional outflow: ₹1 lakh+ per year
That is money you could have invested, saved, or used for family goals.
Don’t Let Your Home Loan Kill Your Wealth-Building
Prashant Mishra (Founder & CEO, Agnam Advisors) sums it up perfectly:
“Your finances should stay comfortable even if interest rates go up by 1–2%. Buying a home should not force you to stop your main investments or damage your long-term goals.”
And this is where many homebuyers make a costly mistake.
They buy the house, pay the EMI, and then stop:
- SIPs
- retirement investments
- children education planning
- emergency savings
They become “house-rich but cash-poor.”
That’s not financial success. That’s financial stress in disguise.
Tax Benefits: Useful, But Don’t Depend on Them Too Much
A home loan does offer tax benefits, but only under the old tax regime.
Key deductions available:
- Section 24(b): Interest deduction up to ₹2 lakh/year (self-occupied home)
- Section 80C: Principal repayment deduction up to ₹1.5 lakh/year
These benefits help reduce taxable income, but they should not be the main reason you take a large loan.
Also, if you’re selling mutual funds or equities to arrange a down payment, consult a tax expert because capital gains tax may apply.
Emergency Fund: Your Biggest Protection Against EMI Stress
Before buying a ₹1 crore home, you should maintain:
Emergency fund of at least 6–12 months of expenses
Because life doesn’t pause after you buy a home.
Unexpected expenses can include:
- medical emergencies
- job changes
- maternity planning
- home repairs
- school admissions
- parental support
Without an emergency fund, even one unexpected situation can push you into credit card debt or personal loans, making the home loan burden even heavier.
Final Thoughts: Repo Rate Stability Is Comfort, Not a Guarantee
Yes, RBI keeping the repo rate unchanged is good news. It provides short-term EMI stability and boosts buyer confidence.
But smart homebuyers know this:
Repo rate stability is temporary. Your loan is permanent.
So before buying a ₹1 crore home, you must:
- Calculate the total ownership cost
- Avoid borrowing at maximum eligibility
- plan EMI affordability with a 1–2% rate hike cushion
- keep investments running
- maintain an emergency fund
- Verify property documents thoroughly
A home should bring peace and pride, not financial anxiety.
If planned correctly, buying a ₹1 crore home can be one of the best decisions of your life.
