On 7 October 2026 the RBI raised the repo rate by 0.25% to 5.50%, the first increase since February 2023. If your home loan is linked to the repo rate (floating), your interest rate can rise by about the same at the next reset.
The bank then usually asks (or decides for you): raise the EMI or the tenure? Example: ₹30 lakh, 20 years, interest going from 8.50% to 8.75%.
| Option | Monthly EMI | Total interest | Tenure |
|---|---|---|---|
| Before (8.50%) | ₹26,035 | ₹32,48,327 | 20 years |
| Raise EMI (8.75%) | ₹26,511 | ₹33,62,717 | 20 years |
| Extend tenure (8.75%) | ₹26,035 | ₹35,72,072 | about 21 years |
How big is the difference?
Raising the EMI by just ₹477 a month adds ₹1.14 lakh in total interest. Keeping the EMI and extending the tenure makes the loan 13 months longer and adds ₹3.24 lakh in interest. So extending the tenure costs about ₹2.1 lakh more.
What should you do?
- If your budget has room for ₹477 a month, ask the bank to raise the EMI.
- If the bank extended the tenure without asking, check the remaining tenure on your loan statement.
- A prepayment of one extra EMI a year can also pull an extended tenure back.
Working: ₹30 lakh, 20-year loan, simple comparison assuming 8.75% from the start. The real effect also depends on how many years of your loan have passed and how much your bank raises the rate.
Change the amount, rate and tenure and see it instantly.
Frequently asked questions
Will a fixed-rate home loan be affected?
No. During the fixed-rate period your rate does not change. The effect is on floating loans linked to the repo or another benchmark.
The bank extended my tenure automatically. What now?
You can give the bank a written request to raise the EMI instead. Bank rules differ, so confirm with your branch or customer care.