Repo rate 5.50%: your EMI, and the choice your bank owes you

You’d almost decided. The flat, the loan, the month you’d move in. Then someone at work said rates are going up again.

So which is it? Wait for rates to turn, or sign and stop guessing? And if you’ve already got a loan running, there’s a quieter worry. How much more, every month, for the next twenty years?

I won’t tell you where flat prices go next. Nobody knows that. What I can do is hand you the real numbers, off the Reserve Bank’s own page and our own list of projects.

So, the short answer. Your EMI is the fixed amount you pay the bank each month. It’s going up, and by less than you fear. The choice your bank is about to make for you matters far more.

The repo rate is 5.50%, up a quarter point

On 7 October the Reserve Bank raised the repo rate from 5.25% to 5.50%. The repo rate is what banks pay the Reserve Bank for short-term money.

Your home loan sits on top of that. A Reserve Bank rule from September 2019 ties every new floating-rate home loan to an outside benchmark. For most banks that benchmark is the repo rate.

All six members voted for the rise. What they split on was the stance, the committee’s own signal about what comes next. They moved it to “calibrated tightening”, which means leaning towards more rises, but slowly. Two members wanted it left at neutral.

The Governor put it plainly the same day. His own statement says that given the current conditions, rate cuts are off the table in the near term. Policy action ahead can only be a rate hike or a pause, depending on the evolving conditions and the outlook.

Read that last clause. He’s describing conditions today, not promising next year. Waiting for a cut is still a bet against the people who set the rate.

Your bank moved next, and not all of them on the same day. SBI’s two benchmark rates each went up a quarter point on 15 October, to 8.15% and 7.75%. Which of the two your loan sits on is printed on your statement.

Bank	Repo-linked rate before	After	From
SBI	7.50%	7.75%	15 Oct
Bank of Baroda	7.90%	8.15%	8 Oct
Indian Bank	7.95%	8.20%	8 Oct
Punjab National Bank	8.10%	8.35%	8 Oct

That table lists each bank’s repo-linked rate. SBI runs a second benchmark as well, the 8.15% one above, and your statement names which of them you’re on.

Every one of them moved the same quarter point, from different places and on different dates. Your own margin sits on top. So a news list of bank rates is only a starting point. Read your lender’s own page before you believe a number.

Your EMI goes up about ₹788 for every ₹50 lakh

Here’s the same loan before and after. We ran it at 8.25% rising to 8.50% over twenty years. Both sit inside the band SBI published this month. Your own rate will differ, and the step is what matters here.

Loan over 20 years	EMI at 8.25%	EMI at 8.50%	Up by
₹50 lakh	₹42,603	₹43,391	₹788
₹1 crore	₹85,206	₹86,782	₹1,576

Those are our own sums, on the standard loan formula. A quarter-point step on a similar loan lands in the same place. Business Today’s own worked example on a ₹50 lakh balance came out at about ₹781 a month more.

Nothing lands in your account yet, though. A repo-linked rate is reset at least once every three months. So your EMI changes on your own loan’s reset date, not on the day of the announcement. Ask your bank when yours falls.

That rule covers loans tied to an outside benchmark since October 2019. An older loan can follow a different one. If yours predates that, ask the branch which rule it sits under.

The choice your bank owes you, and what each one costs

This is the part nobody tells you. At a reset your lender has to offer a bigger EMI, a longer loan, or some of both.

A Reserve Bank circular from August 2023 spells it out. You get “enhancement in EMI or elongation of tenor or for a combination of both options”. Elongation of tenor just means making the loan longer. You can also ask about a fixed rate, or pay off part of the loan early.

The quiet route is the easy one. Your EMI stays where it is, the loan stretches, nothing changes on your statement and nobody argues. That’s exactly why it’s worth asking. Now look at what it costs.

Pay the bigger EMI1.89 lakh

Keep the EMI, pay a year longer5.11 lakh

Keeping the EMI the same means about twelve more payments at the end: 252 instead of 240. That extra year is where the money goes. It costs about ₹5.11 lakh of extra interest instead of about ₹1.89 lakh.

The simple rule: if you can carry the bigger EMI, take the bigger EMI. Letting the loan run a year longer feels free and costs about ₹3.2 lakh more.

Before you decide the bigger EMI fits, write one month down. School fees, the travel pass, the medicines, a parent’s check-up, the one evening out. ₹788 is nothing against a loan. Against what’s left at month end, it’s a lot.

There’s a third way, and it’s the quietest of the lot. Prepay about ₹91,000 on that loan and both the EMI and the end date stay where they were. The same rule lets a borrower prepay in part or in full at any time. And on a floating-rate home loan a bank isn’t permitted to charge an individual a penalty for paying early.

If the bigger EMI won’t fit this year, the longer loan is the right call. It’s a real option, not a trick. Just make the choice yourself, and write the cost down.

One honest limit on all of this. Every rupee figure here is a loan at the start of its twenty years. If you’re five years in, the amounts change. The shape of the choice doesn’t. Ask the branch for your own number.

What isn’t settled, and what we won’t guess

Some of this page is fact and some of it isn’t. You deserve the line between them.

• The committee didn’t promise another rise. Two of six members wanted the stance left at neutral, so even the direction isn’t settled inside the room.
• Its inflation numbers are forecasts, not readings. It put price rises at 5.2% for the year and 6.0% for the October to December quarter.
• Banks pass a rise on at their own dates and by their own amounts. One lender’s rate card tells you nothing about yours.
• Nobody can tell you what flat prices do next, and this page doesn’t try. Rates and prices don’t move together in any reliable way.

A quarter point costs you about ₹91,000 of loan

If you’re still searching, this is your number. Keep your EMI at the same ₹42,603 and a quarter point cuts what a bank will lend you by about ₹91,000. That’s 1.8% of a ₹50 lakh loan.

Does that move you out of the flat you liked? Almost certainly not. Take three flats off our list of Kharghar projects, in the band that loan reaches.

Sai Proviso Atlantis45.99 lakh

Innovative Crystal55 lakh

Tharwani Pristinea63.99 lakh

The steps between them are about ₹9 lakh each. What the rate just took away is a tenth of one step. So your shortlist survives. Your own cash at registration still decides it, and that hasn’t moved.

Those prices come off our page for Sai Proviso Atlantis, Innovative Crystal’s page and Tharwani Pristinea’s page. Our guide to the salary a home loan needs runs the full income test.

And if you’re nowhere near the top of your budget, this barely touches you. Here’s what our own list looks like at that level.

So more than a third of what we list sits under that loan. If you’re shopping in Taloja, a quarter point won’t decide anything for you.

If you rent it out, the gap just got wider

Here’s the honest sum for an investor. You borrow at about 8.50%, and the flat pays you rent. Gross yield is a year’s rent divided by what the flat cost, before any of your expenses.

Our own work on yields in Nerul and Sanpada put that at 2.6% to 5.8%. The flats behind that number sit on our Nerul list. So the rent never covered the loan, and the gap just widened by a quarter point.

One thing works the other way. Interest on a rented flat’s loan is fully deductible in both tax regimes, with no upper cap. That narrows the real gap. Under the new regime, though, the resulting loss can’t be set against your salary or any other income.

That isn’t a reason to sell. It is a reason to stop calling a rental flat bought on a loan an income. You’re buying it out of your salary and the tenant is helping. Price it that way and the quarter point is a rounding error.

If you’re in the right-hand column, nothing here should change your plan. That’s worth saying out loud. Most of what you’ll read this week is written for the left-hand one.

What to watch before the December meeting

Three dates matter, and one of them is yours.

1. 7 Oct 2026 The Reserve Bank raised the repo rate and changed its stance.
2. 15 Oct 2026 SBI’s benchmark rates went up by the same quarter point. Other lenders followed on their own dates.
3. Your reset date Within three months of your last one. Ask your bank for the date, and for the EMI-or-tenor choice in writing.
4. 2 to 4 Dec 2026 The committee meets again. A hike or a pause, on the Governor’s own words.

What I’d do this week

Three things, and none of them takes long.

1. Find your loan’s benchmark and reset date on your last statement. If it isn’t there, ask the branch.
2. Ask for both numbers in writing: the new EMI, and the new length if you keep the EMI. Then pick one.
3. Redo your own monthly budget at the new EMI, not the old one, before you sign anything.

And if you’re mid-search, carry on. A quarter point didn’t change which flats you can reach. Waiting for a cut means waiting for something the committee has taken off the table.

Here’s what I’d say to a friend on the phone. The flat you picked last month is still the flat you picked. The reason you picked it hasn’t changed. A quarter of one per cent doesn’t get a vote on where a family lives.

So send us the loan amount and the rate off your last statement, using the form on this page. We’ll work out all three routes, side by side, and the advisor whose name is on the form will call. Let’s get the number right before December, not after.

Questions buyers ask

My bank hasn’t told me anything. When does my EMI change?

At your own loan’s reset date. A repo-linked rate is reset at least once in three months, so yours falls within three months of the last one. Your statement usually carries the date. If it doesn’t, ask the branch.

Can I just keep my EMI where it is?

Yes, and your lender has to let you. You may take a bigger EMI, a longer loan, or a mix of the two. On a ₹50 lakh loan the longer route costs about ₹5.11 lakh of extra interest against about ₹1.89 lakh. So keep it only if the bigger EMI genuinely won’t fit.

Should I switch to a fixed rate?

Here the rule is weaker than people think. Your lender “may, at its option” offer the switch, under its own board policy. So it isn’t guaranteed, the way the EMI-or-tenor choice is. Ask in writing, and get both quotes side by side.

We couldn’t find a current fixed-rate quote published for home loans here. A fixed rate buys certainty, and the lender prices that certainty in. Nobody knows where this cycle peaks, me included. Decide on what the family can carry, not on a forecast.

Should I wait for rates to come down before I buy?

The committee’s stance moved the other way on 7 October, and the Governor said cuts are off the table in the near term. Meanwhile your rent keeps going out. If the flat and the EMI both work at today’s rate, waiting buys you a forecast, not a home.

I’m buying with cash. Does any of this matter?

Not for the purchase itself. No loan, no reset, no EMI. What changes is the comparison. Ask your bank what its deposit rates do from here, then weigh that against the flat.

My flat is still under construction. Does that change anything?

The rate works the same way, but on less money. Lenders release a part-built loan in stages. So ask the branch two things: how much of the loan has actually gone out, and what the new rate does to the interest on that part alone.

Does the rise change which flats I can afford?

Hardly. For the same EMI a bank will lend you about ₹91,000 less per ₹50 lakh. The chart above shows steps of about ₹9 lakh between real Kharghar projects, so your shortlist holds. Your cash at registration is still the binding number.

Buying your first home here? Our six steps to buying a flat in Navi Mumbai put this in order, from the loan to the keys.