Your Home Loan EMI Is Going Up: What RBI’s Rate Rise Costs on a ₹30, ₹50 and ₹75 Lakh Loan, and Whether to Raise the EMI or the Tenure

If your bank has just sent you a message saying the interest rate on your home loan is going up, you are not alone. On 7 October 2026 the Reserve Bank of India raised its repo rate by 0.25%, from 5.25% to 5.50%, and the banks passed it on within days. Bank of India moved its repo-linked lending rate from 8.10% to 8.35% the same day; SBI moved its benchmark from 7.90% to 8.15% on 15 October. On a ₹50 lakh home loan with 20 years left, 0.25% adds ₹781 to every EMI. This guide shows what it costs on ₹30, ₹50 and ₹75 lakh, the choices RBI says your bank must give you, which one costs least, and what happens to a car loan.

Written on 18 October 2026. The repo rate is from RBI's policy statement of 7 October; Bank of India's rate is from its filing to the stock exchanges that day; SBI's rates are from its interest-rate pages; your choices are from RBI's circular on the reset of floating rates. The worked examples take a home loan rate going from 8.00% to 8.25%: whatever your rate was, it rises by the same 0.25%. The calculator further down takes your own figures.

What happened, in plain words

The repo rate is the rate at which RBI lends money to banks for a day or two. When it goes up, money costs every bank more, and the loans a bank has tied to the repo rate go up with it.

On 7 October 2026 all six members of RBI's Monetary Policy Committee voted to raise the repo rate by 0.25%, to 5.50%. The rate had stood at 5.25% since December 2025. The committee also changed its stance from "neutral" to "calibrated tightening", which is central-bank language for "more rises are possible". It expects inflation of 5.2% this year. Its next meeting is on 2 to 4 December 2026.

Why it reaches you so quickly: since 1 October 2019 every new floating-rate home or car loan from a bank has had to be linked to an outside benchmark, usually the repo rate, and RBI's rules say the rate on such a loan must be reset at least once every three months. Some banks reset at once, as Bank of India did; the rest must do it within three months.

What your bank has done

Your own rate is the bank's benchmark plus or minus your margin, which is written in your sanction letter. The margin does not change because RBI moved, so your rate goes up by exactly the 0.25% the benchmark went up. Bank of India's filing shows it plainly: the repo part went from 5.25% to 5.50%, the 2.85% mark-up stayed where it was.

Older loans tied to a bank's MCLR, rather than to the repo rate, move on their own reset dates, which the sanction letter also names.

What it costs on ₹30, ₹50 and ₹75 lakh

All three loans have 20 years left and go from 8.00% to 8.25%. The middle columns are the cost of paying the higher EMI; the last two are the cost of keeping your EMI and letting the loan run longer.

An easy rule: on a 20-year loan, every 0.25% adds about ₹16 a month for each ₹1 lakh you owe. The EMI on ₹1 lakh goes from ₹836 to ₹852.

Your choices: RBI's rule

RBI's circular on the reset of floating rates, in force for every existing and new EMI loan since 31 December 2023, says what a bank must do when your rate goes up. It must tell you at once if your EMI or your tenure is increasing, and it must give you these choices:

Two more rules help. The bank cannot stretch your tenure so far that your EMI no longer covers the interest and the loan starts to grow; RBI forbids that, and in that case the EMI has to go up. And every quarter the bank must send you a statement showing the principal and interest paid so far, your EMI, the number of EMIs left and the annual interest rate.

A bank may also offer to move you to a fixed rate when your rate is reset. Since 1 October 2025 that is the bank's choice to offer, not a right, and any charge for it must be written in the sanction letter.

Raise the EMI or the tenure: which costs less

On the ₹50 lakh loan, paying the higher EMI costs ₹781 more a month and ₹1.88 lakh more interest over the 20 years. Keeping the old EMI adds 12 EMIs and ₹4.96 lakh more interest. The higher EMI saves you ₹3.09 lakh.

The reason is simple. When the loan runs a year longer, you pay interest for that whole extra year on money you still owe. When you pay ₹781 more a month, that money goes into the loan straight away and stops interest building up.

The longer your loan has left to run, the worse stretching gets. The same ₹50 lakh loan, at 8.00% to 8.25%:

Rises also add up. If rates go up by another 0.25%, so 0.50% in all, a ₹50 lakh loan with 20 years left needs ₹1,569 more a month, or 26 more EMIs and ₹10.80 lakh more interest if the EMI stays the same.

Stretching can also run out of room. Banks set an age by which the loan must be closed; SBI's is 70. If the extra months would take you past it, the bank will raise the EMI instead.

When stretching makes sense: when the higher EMI really does not fit your monthly budget. Take the longer tenure for now, and pull the end date back later with a prepayment.

The third way: prepay once and nothing changes

There is a single amount that, paid now, keeps both your old EMI and your old end date, as if the rate had never risen:

With Diwali three weeks away, a bonus is the obvious source (how a Diwali bonus is taxed). A floating-rate home loan taken by an individual can be prepaid without any charge: RBI barred prepayment penalties on such loans in 2014, and its 2025 Directions repeat the bar for loans sanctioned or renewed from 1 January 2026. When you prepay, tell the bank in writing whether the payment should reduce your EMI or your tenure.

Try it on your own loan

Your bank's message gives you the new rate. Your loan statement or the bank's app gives you the amount still to repay and the EMIs left.

Car loans: most will not change

Many car loans are on a fixed rate. SBI's rate card says the rate applied when the loan is paid out "will remain same for the entire loan period", so an existing SBI car loan EMI does not move at all. A new SBI car loan now costs 8.55% to 9.50%, depending on your credit score, against 8.40% to 9.35% on the rate card of 16 September.

Some banks tie car loans to their repo-linked rate instead. Your sanction letter says which: look for the word "fixed", or for RBLR, EBLR or "floating".

If yours floats, the rise is small, because a car loan is short. On ₹8 lakh over 5 years, going from 9.00% to 9.25% takes the EMI from ₹16,607 to ₹16,704: ₹97 more a month, ₹5,834 over the whole loan.

Buying a car this festive season? Dealers often quote a "flat" rate that sounds cheaper than it is. The flat-rate EMI calculator shows the real rate behind the offer, and this guide to festive car loans and No Cost EMI works through the offers with GST, fees and lost discounts.

Does the higher interest cut your tax?

Under the old regime, interest on a home you live in is deductible up to ₹2,00,000 a year, with a certificate from the bank (section 22(2) of the Income-tax Act, 2025; section 24(b) of the old Act). On a ₹30 lakh loan at 8.25%, the first year's interest is already about ₹2.45 lakh; on ₹50 lakh it is about ₹4.09 lakh. So for most borrowers the extra interest saves no tax at all: they were over the limit before the rise.

Under the new regime there is no deduction for interest on a home you live in, so none of the extra interest comes back. If you are weighing the two regimes, this guide works through the choice.

What to do this week

1. Read the bank's message. Note the new rate, the date it applies from, and whether the bank has raised your EMI or added months.
2. Run your own figures in the calculator above, or in the EMI calculator.
3. If the higher EMI fits your budget, ask for it in writing. RBI's rule gives you that choice, and it costs the least interest.
4. Have a bonus or a fixed deposit falling due? Prepay. There is no charge on a floating-rate home loan.
5. Ask two questions: can you move to the rate the bank now offers new borrowers, and does it offer a fixed rate? Get the cost of each in writing before you decide.
6. Check your next quarterly statement. It must show the EMIs left. Make sure the number matches what you chose.
7. Note 2 to 4 December 2026, RBI's next meeting. Rates can move again.

Planning a new home loan instead? See how much home loan your salary can carry, or the loan eligibility calculator.

Frequently Asked Questions

Why has my home loan interest rate gone up? RBI raised the repo rate from 5.25% to 5.50% on 7 October 2026. Most home loans are tied to the repo rate, so the bank's lending rate went up by the same 0.25%, and your rate with it.

How much will my EMI go up? On a loan with 20 years left, about ₹16 a month for each ₹1 lakh you owe: ₹469 on ₹30 lakh, ₹781 on ₹50 lakh and ₹1,172 on ₹75 lakh, going from 8.00% to 8.25%.

Can my bank increase my tenure without asking me? It must tell you immediately if your EMI or tenure goes up, and RBI's rule gives you the choice of a higher EMI, a longer tenure, a mix of the two, or a prepayment. If the bank has done one and you want another, ask in writing.

Is it better to increase the EMI or the tenure? The EMI, if you can afford it. On ₹50 lakh with 20 years left, the higher EMI costs ₹1.88 lakh more interest; keeping the EMI adds 12 EMIs and ₹4.96 lakh.

Will my car loan EMI go up? Not if it is on a fixed rate, as SBI's car loans are. If it is linked to a repo-based rate, it will rise, but only a little: about ₹97 a month on ₹8 lakh over 5 years.

Can I prepay my home loan without a penalty? Yes, if it is a floating-rate loan taken by an individual. RBI barred prepayment charges on these in 2014, and its 2025 Directions keep the bar for loans sanctioned or renewed from 1 January 2026.

When could rates change again? RBI's next policy meeting is on 2 to 4 December 2026. It has said its stance is now "calibrated tightening", so another rise is possible but not certain.

Rates as at 18 October 2026. EMIs are the standard reducing-balance EMI, rounded to the rupee; your bank's figure can differ by a few rupees because of how it counts days. This is general information, not advice: your sanction letter and your bank's message govern your own loan.

Sources

The rules and figures in this article can be checked against these official sources.

• Monetary Policy Statement 2026-27: resolution of the Monetary Policy Committee, 5 to 7 October 2026 Reserve Bank of India
• Change in Repo Based Lending Rate (RBLR): 8.10% to 8.35% from 7 October 2026, filing to the stock exchanges Bank of India
• External benchmark based lending rate (EBLR), revised from 15 October 2026 State Bank of India
• Home loan interest rates State Bank of India
• Auto loans: interest rates (fixed for the life of the loan) State Bank of India
• Master Direction: interest rate on advances (external benchmark loans reset at least once in three months) Reserve Bank of India
• Reset of floating interest rate on EMI-based personal loans (circular of 18 August 2023, updated to 1 October 2025) Reserve Bank of India
• Pre-payment Charges on Loans: Directions, 2025 (loans sanctioned or renewed from 1 January 2026) Reserve Bank of India
• Levy of foreclosure charges or pre-payment penalty on floating rate term loans (7 May 2014) Reserve Bank of India
• Home loans: frequently asked questions State Bank of India
• Income-tax Act, 2025, section 22: deductions from income from house property, including interest on a home loan Income Tax Department
• Income-tax Act, 2025, section 202: the new tax regime Income Tax Department