The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.5%, offering a moment of relief and opportunity for both home loan borrowers and depositors. This pause, according to experts, is a signal to plan smartly rather than panic, especially in the face of global economic uncertainties.

Adhil Shetty, CEO of BankBazaar.com, explained that the pause in interest rates gives borrowers some breathing space and offers depositors possibly their last opportunity to lock in high fixed deposit (FD) rates. With inflation easing and no immediate rate hikes in sight, the central bank is taking a “wait and watch” approach to economic conditions.

Between February and June, the RBI had cut interest rates by 100 basis points. Now, with inflation at just 2.1% in June, well below the 4% target, the central bank is in no hurry to tighten its monetary policy. This rate decision also comes at a sensitive time, just days before the United States is set to impose steep tariffs on Indian imports, which could affect India’s external trade position.

For home loan borrowers, the RBI’s decision means continued relief. Lending rates have already dropped, and many top banks are offering home loans below 8% for borrowers with good credit scores, especially in balance transfer or refinance options. For example, a ₹60 lakh loan at 8.5% interest for 20 years translates to an EMI of about ₹52,000. Since the repo rate hasn’t changed, these EMIs are likely to remain stable for now.

Shetty advises borrowers paying interest rates more than 50 basis points above the market rate to consider switching to repo-linked loans, which reflect the RBI’s decisions more quickly. For depositors, especially senior citizens, this may be the final phase to benefit from high interest rates. Many banks are still offering over 7.25% on select tenures, and senior citizens can get an additional 25–50 basis points. However, if inflation remains low and the RBI resumes rate cuts later in the year, new FD rates may start falling.

“Locking in fixed deposits now can help protect your returns before rates start to soften,” said Shetty. While the RBI’s cautious move brings short-term stability, it doesn’t guarantee long-term certainty. Borrowers and savers alike are advised to make timely financial decisions during this stable window, as future changes in global and domestic economic conditions may quickly shift the landscape.