Home loan EMIs likely to get costlier

Mumbai: The Reserve Bank of India (RBI) has raised its repo rate by 25 basis points to 5.50%, making borrowing costs a key concern for homebuyers and existing borrowers. This is the first repo rate hike since February 2023.

The RBI’s Monetary Policy Committee (MPC) unanimously approved the hike after its three-day meeting from October 5 to 7. The central bank also changed its policy stance to “calibrated tightening”, signalling that it is no longer looking at rate cuts in the near term. The RBI has raised rates at a time when inflation risks are becoming more visible. RBI Governor Sanjay Malhotra said the inflation outlook is no longer as comfortable as it was last year. “Inflation and its outlook are not as benign as they were last year,” Malhotra said.