Home and car loans are set to get cheaper after the Reserve Bank of India (RBI) Friday cut the repo rate by 25 basis points to 5.25%, the fifth reduction in 2025. The move is expected to nudge banks to further reduce lending rates, offering relief to home, auto and personal loan borrowers. One basis point is a hundredth of a percentage point. Banks have already trimmed lending rates through the year. In response to the cumulative 100-basis-point cut in the policy rate before Friday, the weighted average lending rate (WALR) of scheduled commercial banks on fresh rupee loans fell 69 basis points between February and October 2025, while the pure interest rate effect stands at 78 basis points.