{
  "type": "article",
  "title": "Borrowers Face Higher EMI Burden as Housing Loan Rates Projected to Touch 9 Percent",
  "summary": "Following a recent repo rate revision, the central bank is expected to increase policy rates by up to 1 percent across upcoming quarters to tackle retail inflation.",
  "content": "The era of low borrowing costs appears to be drawing to a close for home loan consumers. When the central bank revised the benchmark repo rate on October 7 after a gap of roughly three and a half years, many market participants perceived the move as an isolated adjustment. However, an analysis by SBI Capital Markets indicates that the recent hike marks only the opening phase of a broader monetary tightening path, pointing toward further interest rate increases in the period ahead.\n\nPolicy Rate Tightening Projected Across Future Quarters\nAccording to projections shared by SBI Capital Markets, the Reserve Bank of India could raise the repo rate by an additional 0.75 percent to 1 percent over subsequent quarters. This upward trajectory is expected to continue well into the following financial year. Should this forecast materialize, home loan interest rates currently pegged around 8 percent could climb to 9 percent, directly raising the financial burden on borrowers through elevated equated monthly installments.\n\nRetail Inflation Pressures Drive Tougher Monetary Stance\nThe central bank is relying on higher borrowing costs primarily to rein in persistent retail inflation. During the previous Monetary Policy Committee meeting, the central bank implemented a 0.25 percent increase in the benchmark repo rate while officially shifting toward a stricter policy stance. Given the lingering inflationary pressures across the economy, projections indicate that rate setters may enact another rate hike as early as the start of financial year 2028.\n\nWhat this means for you\nA potential upward revision in policy rates will directly strain the monthly budgets of household borrowers and prospective home buyers.\n\n• Higher monthly payments: If floating home loan rates rise from 8 percent to 9 percent, monthly loan repayments will automatically increase. Borrowers will need to allocate more income toward debt servicing.\n• Extended loan tenures: Financial institutions frequently extend the overall repayment period instead of immediately raising the monthly installment. This approach increases the total interest accrued over the life of the loan.\n• Borrowing capacity constraints: Individuals planning to purchase residential property will face higher financing costs. Elevated lending rates reduce overall loan eligibility under existing income levels.\n• Household budget adjustments: The projected rate hike of up to 1 percent could extend into the next financial year. Families with active borrowings should review prepayment options to limit cumulative borrowing expenses.\n\nWhy this happened\nThe central bank is pursuing a stricter monetary policy specifically to curb stubborn price rises across the consumer economy.\n\n• Retail inflation trends: Consumer prices have maintained an upward trajectory across recent months. Raising benchmark lending rates serves as the standard tool to cool demand and temper price acceleration.\n• Shift to a tighter stance: During its recent policy review, the rate-setting committee raised the repo rate by 0.25 percent and adopted a more restrictive stance. This programmatic adjustment signaled that further increases would follow rather than pause.\n• Extended price pressures: Economic assessments suggest that inflationary headwinds will persist into the beginning of financial year 2028. This continuing pressure underpins expectations of further hikes totaling 0.75 to 1 percent over the coming quarters.\n\nQuestions & Answers\n\n1. When did the central bank last raise the repo rate?\nThe central bank raised the benchmark repo rate by 0.25 percent on October 7 after a gap of approximately three and a half years.\n\n2. How much more could the repo rate increase in future quarters?\nProjections by SBI Capital Markets indicate the repo rate could climb by another 0.75 percent to 1 percent.\n\n3. How would this impact home loan interest rates?\nHousing loans currently serviced at an 8 percent interest rate could rise to 9 percent.\n\n4. What is compelling the monetary authority to hike rates?\nRising retail inflation is the primary reason forcing the central bank to tighten borrowing costs.\n\n5. How long is this cycle of rate hikes expected to persist?\nThe tightening cycle is expected to continue through the next financial year and potentially into early financial year 2028.",
  "url": "https://trendkia.com/en/business/karjadaron-para-barhega-emi-ka-bojha-housing-loan-ki-daren-9-pratishata-taka-pahunchane-ka-anumana-46043",
  "category": "Business",
  "publishedAt": "2026-10-10",
  "tags": [
    "Home Loan",
    "Repo Rate",
    "RBI",
    "SBI Capital",
    "Interest Rate",
    "Retail Inflation"
  ],
  "language": "en",
  "site": "TrendKia"
}