RBI raised the repo rate by 0.25 percentage points to 5.50% on 7 October 2026, its first hike in nearly four years. If your home loan is linked to the repo rate, your interest rate goes up at the next reset. Enter your loan details to see exactly what it costs you, and whether a higher EMI or a longer tenure works out cheaper.
How a repo rate change reaches your loan
Most home loans taken since October 2019 are linked to an external benchmark, usually the repo rate (EBLR or RLLR). Your rate is the repo rate plus a fixed spread, so a 0.25-point hike raises your rate by 0.25 points, typically from the next reset date, which falls at least once every three months. Older MCLR-linked loans move more slowly and only change on their annual or half-yearly reset date.
Why a longer tenure costs you more
When rates rise, banks usually keep your EMI the same and quietly add months to the loan. That feels painless but is the expensive option, because you pay interest for longer. On a ₹50 lakh, 20-year loan at 7.15%, a 0.25-point hike costs about ₹1.8 lakh if the EMI rises by roughly ₹760, but about ₹4.3 lakh if the bank adds 11 months to the tenure instead.
Your rights at a rate reset
- Your lender must tell you how the change affects your EMI and tenure.
- You can choose a higher EMI, a longer tenure, or a mix of both.
- You can ask to switch to a fixed-rate loan, subject to the lender’s terms.
- Floating-rate loans to individuals carry no prepayment charge, so part-prepaying to absorb the hike is free.
What to do after the October 2026 hike
Check your loan statement for the benchmark (EBLR or MCLR) and the next reset date. If your bank extends the tenure by default, ask it to raise the EMI instead, or make a part-prepayment. And if your spread is high compared with what new borrowers get, a balance transfer or a rate conversion can cancel out the hike.
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