RBI repo rate hike to raise home loan EMIs

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New Delhi: Home loan borrowers are likely to see their equated monthly instalments (EMIs) rise after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 5.50 per cent on Wednesday, although real estate industry leaders expect the impact on housing demand to remain limited.

The rate hike could increase borrowing costs for homebuyers with floating-rate loans if banks transmit the full 25 basis point increase to their lending rates.

For instance, on a Rs 50 lakh home loan for 10 years at an interest rate of 8 per cent, the monthly EMI is around Rs 60,664. If the lending rate rises by 25 basis points to 8.25 per cent, the EMI would increase to around Rs 61,326, translating into an increase of about Rs 662 per month or nearly Rs 7,944 annually.

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The latest rate increase comes after the RBI had reduced the repo rate by a cumulative 125 basis points during 2025 to 5.25 per cent and subsequently kept it unchanged through four consecutive policy reviews.

While the latest hike is expected to put some pressure on home loan affordability, industry leaders said strong buyer sentiment, festive demand and underlying housing demand are likely to cushion the immediate impact on the residential real estate market.

The latest repo rate hike, therefore, is set to increase borrowing costs for floating-rate home loan borrowers, but real estate industry leaders expect resilient buyer sentiment and sustained demand across key housing segments to limit the immediate impact on residential sales.

Also Read: RBI Hikes Repo Rate By 25 Bps To 5.50%

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