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RBI Repo Rate Hike: How Much Will Your 30 Lakh Home Loan EMI Increase?
- •The Reserve Bank of India has hiked the repo rate by 0.25 percent to control rising inflation.
- •Following the rate hike, banks have increased interest rates, making home and car loans more expensive.
- •For a 30 lakh home loan with a 20-year tenure, the monthly EMI will increase by 520 rupees.
- •Financial experts advise increasing the EMI amount or making prepayments rather than extending the loan tenure.
Key Questions Answered
The Reserve Bank of India increased the repo rate by 0.25% (25 basis points) during its monetary policy committee meeting to control rising inflation, creating an additional financial burden for loan borrowers. Governor Sanjay Malhotra announced the hike following a three-day meeting.
Banks are raising home loan interest rates from an average of 8.35%-8.75% up to a range of 8.60%-9.00%. For a Rs 30 lakh home loan at an 8.75% interest rate, the monthly EMI will increase from Rs 25,991 to Rs 26,511 for a 20-year tenure, and from Rs 23,067 to Rs 23,626 for a 30-year tenure.
Instead of accepting higher monthly installments, borrowers can choose to keep the tenure same by paying a higher EMI amount, or they can opt to make partial prepayments to manage the increased interest burden. Financial experts advise increasing the EMI amount or making prepayments rather than extending the loan tenure.
