Effect of hike in repo rate on home loan EMI
Your home loan EMIs will become costlier due to the increase in the repo rate. Let us assume that the home loan rate of the bank from which you have taken the home was 8.10 percent earlier and you have taken this loan for a period of 20 years. In such a situation, earlier you had to pay an EMI of Rs 25,280 on a loan of Rs 30 lakh, but now you will have to pay Rs 26,225. Similarly, if your loan is of Rs 50 lakh or Rs 1 crore, then see in the chart how much money you will have to repay now as compared to earlier.
|Home Loan Amount||Interest Rate (in %)||Duration (Years)||Current Installment (in Rs.)||New interest rate (in %)||Enhanced Installment (in Rs.)|
How Repo Rate Affects EMI
This time the repo rate has been increased by 50 basis points i.e. 0.50 percent by the Reserve Bank. The increase in the repo rate simply means that banks will get loans from the Reserve Bank at a higher rate. In such a situation, banks transfer this increase to the customers, which also makes the loan rates expensive for them. This not only makes new loans expensive, but also increases the EMI of those already running home loans or auto loans. While this will not affect the personal loan EMI, new personal loans will become costlier.
If someone has taken an auto loan of eight lakhs for seven years, then the interest rate will increase from 11 per cent to 11.50 per cent. This will increase the installment from Rs 13,698 to Rs 13,909. That is, it will increase by Rs 211. Similarly, if someone has taken a loan of Rs 5 lakh for five years, then his interest rate will increase from 15 per cent to 15.50 per cent. He will now have to pay Rs 12,027 instead of Rs 11,895. That is, his monthly installment will increase by Rs 132.
RBI Repo Rate Hike: If you are thinking of buying a house or a car during the festival, then the news that spoils the mood has arrived!