Repo Rate Up 25 bps: Higher EMI or Longer Tenure?
RBI hiked repo rate by 0.25%. Your home loan EMI went up. Now your bank is offering two choices: pay more each month or stretch your loan longer. One option costs you lakhs more — here's which one.
That 'small' tenure extension on a ₹50L loan costs more than a Maruti Alto.
What a longer tenure quietly costs your ₹50L home loan
Key Takeaways
Call your bank or check your loan account online to confirm whether your tenure was extended or your EMI was increased after the rate hike.
Ask your bank to switch you to the higher-EMI option if tenure was extended — this one call can save you lakhs in total interest paid.
Use a home loan EMI calculator to compare total interest outgo under both options for your exact loan amount before deciding.
RBI hiked repo rate by 0.25%. Your home loan EMI went up. Now your bank is offering two choices: pay more each month or stretch your loan longer. One option costs you lakhs more — here's which one.
Here's what happened: RBI raised the repo rate by 25 basis points to 5.50%, prompting banks to hike home loan lending rates linked to external benchmarks.. Borrowers with floating-rate home loans face a choice: absorb higher EMIs each month or let the bank extend the repayment tenure.. Calculations show extending tenure on a ₹50L loan can cost over ₹6 lakh more in total interest compared to simply paying a higher EMI..
What you should do: Call your bank or check your loan account online to confirm whether your tenure was extended or your EMI was increased after the rate hike.. Ask your bank to switch you to the higher-EMI option if tenure was extended — this one call can save you lakhs in total interest paid.. Use a home loan EMI calculator to compare total interest outgo under both options for your exact loan amount before deciding..
Most banks default to extending your tenure (not raising EMI) after a rate hike — it feels easier but costs far more. You must actively request the EMI increase; banks rarely volunteer it.
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- [1]“Home loan of ₹30 lakh, ₹50 lakh or ₹1 crore: Higher EMI or longer tenure—Here's what works better. Calculation explained” mint - money · 20 Oct 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.
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