RBI raised the repo rate to 5.50%: what it can mean for your home loan EMI
On 7 October 2026 the Reserve Bank of India announced the outcome of its 63rd Monetary Policy Committee meeting. According to the MPC resolution on the RBI website, the policy repo rate was raised by 25 basis points to 5.50%, and the decision was unanimous. The Standing Deposit Facility rate is now 5.25%, and the Marginal Standing Facility rate and Bank Rate are 5.75%. The committee also changed its stance to "calibrated tightening". The same resolution projects consumer price inflation of 5.2% for 2026-27.
A basis point is one hundredth of a percentage point, so 25 basis points is 0.25 percentage points. That sounds small. This post shows what a change of that size does to a loan EMI, so you can judge it for your own loan.
What the repo rate is, in one line
The repo rate is the rate at which the RBI lends to banks. It is a policy rate, not the rate on your loan. Your lender sets your loan rate, and whether and when a change in the repo rate reaches your EMI depends on how your loan is priced and the terms in your sanction letter. Check that letter, or ask your lender, whether your loan is floating and what it is linked to. Fixed-rate loans do not change during their fixed period.
A worked example
We use round numbers that we calculated ourselves. These are not any bank's actual rates.
Take a home loan of Rs 50,00,000 for 20 years (240 monthly instalments).
- At 8.00% a year, the EMI is about Rs 41,822. Over 240 months you would pay about Rs 1,00,37,281 in total, which means about Rs 50,37,281 is interest.
- At 8.25% a year, which is 0.25 percentage points higher, the EMI is about Rs 42,603. Over 240 months you would pay about Rs 1,02,24,788, so about Rs 52,24,788 is interest.
The difference is about Rs 781 more per month, or roughly Rs 1,87,507 more interest over the full 20 years if the rate stayed at 8.25% the whole time. A rate rise does not always mean a higher EMI. Some lenders keep the EMI the same and lengthen the tenure instead, which also raises the total interest. Ask which approach your lender uses.
What you can do
- Find out first. Look at your latest loan statement. Is the rate floating? When is it reset? Your lender can tell you.
- Run the numbers. Enter your outstanding principal, current rate and remaining years in the Gunaka EMI calculator, then try a rate 0.25 higher to see the change.
- Check your budget. An extra Rs 781 a month on a Rs 50 lakh loan is manageable for many households, but a bigger loan or a bigger rate change will cost more. Plan for it before it arrives.
- Part-payments. Paying extra towards the principal reduces interest. The calculator has fields for a monthly extra payment and a one-time part-payment. Check your loan agreement for any conditions before you pay.
A note on rates going forward
The RBI's statement describes its current view, and views change at each meeting. Nobody can promise where rates will go, so treat the example as a way to test your own budget, not a forecast.
Gunaka gives estimates for planning, not financial advice. For decisions about your own loan, talk to your lender.
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