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The Reserve Bank of India (RBI) has increased the repo rate by 50 basis points today and it reached 5.4 percent. The Central Bank of India is also focused on the withdrawal of an accommodative stance for the maintenance of the inflation. Repo rate is the rate at which the commercial banks will borrow money from the Reserve Bank of India. If the repo rate gets increased, the cost of borrowing loans from the banks would get increased. The banks will pass the costs that are rising to the borrowers and will hike the interest rates of loans. The home loan EMIs are expected to increase after the RBI hiked the Repo rate,.
RBI has increased the repo rate by 140 basis points in this year. The total percentage increase is said to be 1.4. This will have an impact on the home loans of the new and existing borrowers. The impact would also be immediate as it is linked to the lending rate with repo. For all those, who took their home loans before April this year, the interest rate will rise around 8 percent from 6.5 percent as per the August Monetary Policy of the RBI. The rate hikes will also have an impact on the home loans and the real estate market in the country. The repo rate hiked is also a higher one as per the analysts and experts.