As the Reserve Bank of India (RBI) announces its first monetary policy decision for FY2025-26 today, April 9, speculation is high that a 0.25% repo rate cut could be on the cards. If the repo rate is indeed slashed, it will bring good news for millions of borrowers — but not for everyone.

If you’ve taken a home loan at a fixed interest rate, don’t expect your EMIs to come down even after a rate cut. However, there is a way to take advantage of falling interest rates — but you need to act.

Why Fixed Rate Loan Borrowers Won’t Benefit

A fixed rate loan means your interest rate is locked in when the loan is sanctioned. Whether the RBI hikes or cuts the repo rate, your EMI remains unchanged throughout the loan tenure. This provides certainty but lacks flexibility during rate reductions.

Want Lower EMIs? Do This Immediately

To benefit from a repo rate cut, switch your loan from a fixed rate to a floating rate. A floating rate loan is directly linked to market interest rates like the repo rate. So, when the RBI reduces the repo rate, the interest on your loan also goes down, resulting in lower EMIs.

Can You Switch Your Loan Type?

Yes. Most banks allow you to switch between fixed and floating interest rates. The process usually involves:

• Visiting your bank or loan provider
• Submitting a formal request to switch
• Paying a nominal conversion fee

This fee is often far less than the long-term savings you’ll enjoy through reduced EMIs.

In Summary

• If you're on a floating rate loan: A repo rate cut can lower your EMI automatically.
• If you're on a fixed rate loan: You won’t benefit unless you switch to a floating rate loan.
• To switch: Contact your bank, fill out the form, pay a small fee, and start saving on interest.