Reserve Bank of India (RBI) A recent repo rate (Repo Rate) Has increased. The increase was 0.4 per cent to 40 basis points. Repo rate Except other policy rates were increased. The increase in repo rate is good news for Fixed Deposit (FD). But for a loan, nothing could be worse. Banks raise lending rates due to increase in repo rate which makes loans more expensive. An increase in the repo rate means an increase in the interest rate on the loan. Especially home loan rates (Home Loan Interest Rate) Will be more than before. If you have already taken a home loan, be sure to check its EMI once. If you want, you can also find out in the bank what the impact will be on loan rates. The increase in EMI will vary for different loan amounts.
How much will the EMI increase on how many loans?
Suppose you have taken a home loan of Rs 30 lakh for a period of 20 years. So far it has been running at 6.75 per cent. The EMI will be Rs 22,811. But if the repo rate hike raises the interest rate by 40 basis points, the loan rate will be 7.15%. In such a case, the new EMI would be Rs 23,530. If you look at the difference between old and new EMI, it will be Rs 719. This means that an increase in the repo rate will increase the additional burden of Rs 719 per month on your loan.
Suppose you have taken a home loan of Rs 50 lakh for 20 years. At the current rate of 7%, EMI is Rs. 38,018. After the new rate of 7.40%, the home loan EMI will grow rapidly. At this rate, the new EMI will be Rs. 39,216. Thus, EMI will see an increase of Rs 1,198. You will have to pay an additional Rs 1,198 per month on the loan.
Let’s take the next example of a home loan of Rs 75 lakh. One person has taken a home loan of Rs 75 lakh for a term of 20 years. The current interest rate is 6.75 per cent, but with an increase of 40 basis points it reaches 7.15 per cent. In such a case, the new EMI of the home loan would be Rs 58,825. The difference between new and old EMI will be Rs.
After raising the repo rate, it is only natural that banks will raise interest rates on home loans. This will affect existing customers as their rates were lower before, but now they have to pay more interest. Home loans will already be available to new customers at an increased rate.
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