The rate cut can work out for existing home loan borrowers in 2 ways – the banks can either decrease the loan period or the EMI. When RBI had raised the rates 13 times, a few banks had even extended the loan period to 30 years, which in many cases exceeded the retirement age of the borrowers.

A few home financing institutions believe that banks may lessen the loan period for older borrowers than first-time the younger ones. Jayanth Pai, Vice-President of Parag Parikh Financial Advisory Services, says, "For instance, a 48-year-old borrower whose loan tenure is 15 years has greater chances of tenure reduction than EMI reduction."

Tenure or EMI reduction also depends on the amount of home loan exposure the financial institution or bank has. Pai also says, "Those institutions that have a big home loan book would benefit from a tenor reduction."