RBI raised the repo rate by 0.25%: what it means if you are about to buy a home

On 7 October 2026 the RBI raised the repo rate by 0.25 percentage points, from 5.25% to 5.50%. If you are about to take a home loan, the question is which rate your loan will actually carry, and from when. That depends on a date and a document, not on the headline.

Four cases

• Your loan is sanctioned and disbursed at today's rate. The 0.25% is already in your rate and your EMI. Nothing extra arrives at the first reset from this hike.
• You were quoted, or sanctioned, at a rate from before 7 October. Ask which rate applies on the day of disbursement. If it is the old rate, a repo-linked loan takes the hike at its first reset, within three months, and if the EMI is held the tenure moves instead.
• Your loan is linked to MCLR. The change waits for the lender's own reset, often twelve months away.
• Your flat is under construction and the loan is paid out in stages. A quote from before 7 October can take the 0.25% at its first reset, and the higher rate then applies to everything paid out so far and to every later payout, through the whole construction period. See the figures for your loan by choosing Under construction.

So the line "if you buy before 15 December your rate will rise" is only true for the second case. On this site's 15th-of-the-month convention, a quarterly reset takes a 7 October decision by 15 December at the latest. The calculator shows both outcomes for your own numbers.

What to ask your lender, in writing

• Which rate applies on the disbursal date: the rate in my sanction letter, or the benchmark on that day?
• What is the benchmark (repo-linked EBLR or MCLR), the spread, and the reset frequency?
• When is my first reset date?
• Is my EMI calculated at the current rate, and what happens to my EMI or tenure at a reset?

Illustration: the calculator applies the new rate from the first EMI. In practice the change arrives at your first reset, after a few EMIs, which gives nearly the same figures because little principal has been repaid by then. This page shows what a rate does to a loan. It does not forecast the RBI and does not tell you whether, when or from whom to borrow.

Related: typical calculator vs LoanRepo before you buy, before you buy a home loan, 20 vs 25 vs 30 years. Already have a loan? See the part-payment that cancels the extra tenure.

Questions

Will my home loan rate go up by 0.25% if I buy before 15 December?

Only if your loan carries a rate from before 7 October. A loan disbursed at today's rate already includes the hike. A repo-linked loan priced at the older rate takes the hike at its first reset, within three months. Ask your lender in writing which rate applies on the disbursal date.

Will the tenure of a new home loan increase after the hike?

Only if the rate rises after your EMI is set and you keep the EMI. A loan priced at today's rate starts with the tenure you chose. The calculator shows how many months a 0.25% rise would add on your own figures.

Does a repo rate hike affect an MCLR-linked loan immediately?

No. An MCLR loan changes at its own reset, often every twelve months, so the hike arrives later than on a repo-linked loan.