The hike in the repo rates by the RBI last week will make home loans more costly. RBI has hiked the repo rates by0.25 basis, if banks follow the move then this can be a great cause of worry for home loan buyers. If the banks will revise their lending rates in the same proportion then home loans will be become costly.
At present if a customer goes for home loan of 10 lakhs for 15 years (180 months) with an interest charged at 11% then after the hike of 0.25% then for the same customer will need to pay 7 extra EMIs i.e. 187 months. This sudden increase in repo rates has come as dampener for the customers. Home loan Customers were expecting some ease for them from RBI. They were in the hope of lower loan rates but, now they have to prepare themselves to pay more and look for the banks providing with the minimum rates.