In the year following it is apparent that the EMI of your mortgage has become costly. In announcing its first monetarist policy in 2023 . The RBI has raised the repo rate by a quarter of a percentage as well as made changes to the rate of interest. The repo rate was raised from 6.25 percent to 6.50 percent. In the past, RBI has increased the repo rate by 2.25 percent during five monetary policy sessions in 2022.
Impact of increasing the repo interest rate of RBI
The repo rate will be increased after the change of RBI by transferring banks from public-private and housing finance firms will raise the interest rates for mortgages for homeowners, and after that, your EMI will be more costly. We’ll tell you how costly your EMI will be.
How much was the EMI increase for a home loan worth Rs. 25 lakh?
If the largest bank in the country SBI required an EMI of 21,854 rupees for the home loan amount of 25 lakh over 20 years, at an interest of 8.60 percent. After the 25-basis point increase in repo rates, the interest rate would rise to 8.85 percent, after which the EMI must be paid at a rate of Rs 22,253. So your EMI will increase in cost by approximately Rs.400.
EMI was increased on home loans worth around Rs 40 lakh
Presently in the present, the EMI for home loans of 40 lakh over 20 years, with an annual rate of 8.60 percent is 34,967. After an increment of 0.25 percent in repo rates interest has to be paid at an amount that is 8.85 percent, which means that an EMI of 35,604 Rs is required to be paid. In other words, each month, Rs 637 more EMI must be paid.
Presently EMI on a 50-year home loan
For a home loan of 50 lakh over 15 years the EMI was Rs 49,531 with an interest rate of 8.60 percent. However, due to the increase in the repo rate the EMI of 50,268 would need to be settled. This means that Rs 737 will be a significant amount each month.
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