RBI Raises Repo Rate to 5.50%: What It Means for Your EMI

What happened. On 7 October 2026 the RBI raised the repo rate by 0.25%, from 5.25% to 5.50%, and changed its stance to "calibrated tightening". It also raised its inflation forecast for FY27 to 5.2%, citing crude oil prices among the reasons (Business Standard).

What it does to your EMI. Banks passed the hike on within a day: Bank of India from 7 October, the rest from 8 October. Punjab National Bank, Bank of India and Indian Overseas Bank moved their repo-linked lending rate from 8.10% to 8.35%, Indian Bank from 7.95% to 8.20%, and Bank of Baroda from 7.90% to 8.15% (BW Businessworld). If your loan is linked to the repo rate, expect your rate to rise by about 0.25% at its next reset, which must happen at least once every three months.

What to do now. Check the rate on your latest loan statement against what lenders publish today. If yours is well above the market, a balance transfer can still lower your EMI even after this hike.

How much more you will pay

Worked out with the standard EMI formula:

Loan	Rate before	Rate after	EMI goes up by
₹50 lakh Home Loan, 20 years	7.35%	7.60%	about ₹764 a month
₹1 crore Loan Against Property, 15 years	9.00%	9.25%	about ₹1,493 a month

Some lenders keep the EMI the same and stretch the tenure instead. That feels painless, but you pay more interest overall. If your lender has done this, ask whether you can keep the original tenure.

Which loans move, and when

• Repo-linked loans (most Home Loans, Loans Against Property and MSME loans taken since 2019): move with the repo rate, at the next reset.
• MCLR-linked loans (mostly older loans): move only at the loan's reset date, every 6 or 12 months, and follow the bank's funding costs rather than the repo rate directly.
• Fixed-rate loans (most Personal Loans and car loans): your EMI does not change, but new loans may be priced higher.

Your options

1. Ask your lender to reset your rate. If your spread is high, many banks will lower it for a small conversion fee.
2. Move to a cheaper lender. Use the Rate Check to see what switching saves after processing fees and other costs.
3. Prepay if you have surplus cash. Lenders cannot charge individuals a foreclosure or part-payment penalty on floating-rate loans taken for personal purposes.

Compare the starting rates lenders publish on our loan rates page.

Check whether switching lowers your EMI. Call or WhatsApp us on 099108 50208, or message us on WhatsApp.

Rates mentioned are published starting rates and bank benchmark rates on the dates shown, for information only, not loan offers. Your actual rate depends on the lender's assessment of your credit score, income, property and loan amount. BizzBuddy is a loan facilitation and advisory platform, not a lender.