Repo Rate: EMI of your house will increase so much from tomorrow! RBI is going to decide


From May this year, the RBI has increased its repo rate by up to 140 basis points, due to which the home loan interest rate of banks has increased by 75 basis points. In the meeting of RBI on 30 September, it will be decided how much the repo rate will increase.



TV9 Bharatvarsh | Edited By: Ravikant Singh



Sep 29, 2022, 7:13 PM IST





If you are going to take a loan or are preparing to take a loan, then know. A big change is going to happen from tomorrow. Tomorrow the Reserve Bank may increase the repo rate. Your loan will become costlier as the repo rate increases. Taking a new loan will be expensive, as well as the old loan will also increase as compared to earlier. Your EMI will increase, which will have a direct effect on your money. The MPC meeting of the Reserve Bank is going on in which a decision on increasing the repo rate can come on 30 September. This will be the fourth hike in this financial year.

Due to the strengthening of the dollar and the rise in inflation, most of the experts are expressing the possibility of increasing the repo rate.  Retail inflation has been 7 percent in August, to control which RBI can increase the repo rate by 35 to 50 basis points.  Looking at the situation in the country and the world, there is a possibility of increasing the repo rate by 50 basis points.  With the increase in the repo rate, all types of floating rate retail loans linked to external benchmarks will become costlier.  Most external benchmarks are linked to the repo rate.  Therefore, retail loans will become expensive as the repo rate increases.

Due to the strengthening of the dollar and the rise in inflation, most of the experts are expressing the possibility of increasing the repo rate. Retail inflation has been 7 percent in August, to control which RBI can increase the repo rate by 35 to 50 basis points. Looking at the situation in the country and the world, there is a possibility of increasing the repo rate by 50 basis points. With the increase in the repo rate, all types of floating rate retail loans linked to external benchmarks will become costlier. Most external benchmarks are linked to the repo rate. Therefore, retail loans will become expensive as the repo rate increases.

Any change in the repo rate will impact the home loan the most.  The EMI of the loan will increase as soon as there is a change in the home loan.  Loans which are linked to MCLR, Base Rate and BPLR, their EMI will also be affected.  If the Reserve Bank will increase the repo rate by 50 basis points, then banks can increase their lending rate by 25 to 50 basis points.  From May this year, the RBI has increased its repo rate by up to 140 basis points, due to which the home loan interest rate of banks has increased by 75 basis points.

Any change in the repo rate will impact the home loan the most. The EMI of the loan will increase as soon as there is a change in the home loan. Loans which are linked to MCLR, Base Rate and BPLR, their EMI will also be affected. If the Reserve Bank will increase the repo rate by 50 basis points, then banks can increase their lending rate by 25 to 50 basis points. From May this year, the RBI has increased its repo rate by up to 140 basis points, due to which the home loan interest rate of banks has increased by 75 basis points.

Experts say that due to the increase in the repo rate, the loan of the customers of all the banks will not increase rapidly.  It depends on the bank how much it compensates its customers in view of the increase in the repo rate.  If we look at the record of the last four months, despite the increase in the repo rate, banks have increased the MCLR by up to half.  For example, State Bank has increased the MCLR by 70 basis points in 2022 while the repo rate has increased by 140 basis points till August.  Now everyone's eyes will be on the MPC meeting of 30 September and the increase in the repo rate.

Experts say that due to the increase in the repo rate, the loan of the customers of all the banks will not increase rapidly. It depends on the bank how much it compensates its customers in view of the increase in the repo rate. If we look at the record of the last four months, despite the increase in the repo rate, banks have increased the MCLR by up to half. For example, State Bank has increased the MCLR by 70 basis points in 2022 while the repo rate has increased by 140 basis points till August. Now everyone’s eyes will be on the MPC meeting of 30 September and the increase in the repo rate.

Now it is necessary to know how much EMI will increase due to increase in repo rate.  For example, if a person has taken a loan of Rs 30 lakh from State Bank for 20 years, then his current rate is 8.35%.  At this rate, the customer needs to pay an EMI of Rs 25,751.  This EMI is before the repo rate hike.  If the RBI increases the repo rate by 50 basis points, then the home loan interest rate will increase to 8.85 percent.  On this basis, the EMI will increase to Rs 26,703.  In this way, the customer will have to pay Rs 952 more than before.

Now it is necessary to know how much EMI will increase due to increase in repo rate. For example, if a person has taken a loan of Rs 30 lakh from State Bank for 20 years, then his current rate is 8.35%. At this rate, the customer needs to pay an EMI of Rs 25,751. This EMI is before the repo rate hike. If the RBI increases the repo rate by 50 basis points, then the home loan interest rate will increase to 8.85 percent. On this basis, the EMI will increase to Rs 26,703. In this way, the customer will have to pay Rs 952 more than before.


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