The Reserve Bank of India (RBI) is expected to raise the repo rate by 25 basis points to 5.50% at its October 7 monetary policy review, according to market expectations. The move could increase borrowing costs for customers with floating-rate home loans. A 25-basis-point increase could raise the EMI on a Rs 50 lakh home loan at 7.5% for 25 years by around Rs 817 per month, depending on the lender and loan structure. Borrowers may therefore face higher EMIs or a longer repayment period. The rate hike could also affect fixed-deposit investors, although existing FDs are generally expected to continue at their booked interest rates. Banks may increase rates on new FDs and renewals if market interest rates move higher. The possible rate increase could have a mixed impact on consumers, with home-loan borrowers facing higher borrowing costs while FD investors may get better rates on future deposits. The actual impact will depend on the RBI's final decision and how individual banks revise their lending and deposit rates.
RBI Repo Rate Hike Expected: How Will It Affect Home Loans and FDs
Oct 06 2026
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