New Delhi, June 10 -- The Reserve Bank of India (RBI) cut the repo rate by 125 basis points to 5.25% through 2025 before shifting to a neutral stance and keeping rates unchanged at its last two policy meetings.

Repo rate is the rate at which the central bank lends to other banks, serving as the benchmark interest rate that influences most floating-rate home loans linked to the External Benchmark Lending Rate (EBLR).

For home-loan borrowers, that should have meant cheaper loans. But a closer look may reveal a different picture.

The reason lies in a less visible component of loan pricing: the spread. Understanding it can make the difference between assuming you are benefiting from a rate cut and discovering that much of the benefit has b...