Repo Rate Hiked 25 bps: Your EMI Goes Up?

RBI raised the repo rate by 0.25% to 5.5% and switched to a tightening stance. If your home or personal loan is on a floating rate, your bank can legally raise your EMI — and another 0.50% hike may follow in FY27.

Here's what happened: RBI's Monetary Policy Committee raised the repo rate by 25 basis points to 5.5%, reversing the neutral policy stance it held in recent meetings.. The MPC officially shifted its stance to 'calibrated tightening', signalling that further rate hikes — not cuts — are the direction for the near future.. Market analysts now expect an additional 50 basis points of hikes across FY27, which would push the repo rate to 6% or above within 12 months..

What you should do: Call your bank or check your loan account app this week to confirm whether the rate hike triggers a higher EMI or an extended loan tenure — both cost you money differently.. Compare your current floating rate against fixed-rate refinancing offers from other lenders; if another 50 bps of hikes is coming, locking in now could save you lakhs over the loan term.. If you plan to take a new home, car, or personal loan in the next 6 months, calculate your EMI at 6% — not today's rate — so you don't overstretch your budget..

Most banks extend your loan tenure silently instead of raising EMI. Request a written confirmation of which adjustment your bank made — tenure extension means you pay interest for extra years, costing far more overall.