The Reserve Bank of India (RBI) raised its key policy rate — the repo rate — by 25 basis points to 5.50% on 7 October 2026. It was the first rate hike since February 2023, and it means home loan and other loan EMIs are likely to go up.

What the RBI decided

  • Repo rate: raised from 5.25% to 5.50% (25 basis points), by a unanimous vote of the six-member Monetary Policy Committee (MPC)
  • Stance: changed to “calibrated tightening” — the RBI says this signals rate cuts are off the table in the near term, and the next move can only be a hike or a pause
  • Other rates: Standing Deposit Facility (SDF) 5.25%, Marginal Standing Facility (MSF) and Bank Rate 5.75%
  • Meeting: the MPC met from 5 to 7 October 2026; the decision was announced on 7 October

What it means for borrowers

  • Home loans: banks have already started passing on the hike — Punjab National Bank raised its MCLR by 10 basis points across all tenures from 1 November 2026, while Bank of India cut some rates by 10 basis points
  • EMIs: a 25-basis-point rise typically adds a small amount to monthly EMIs on floating-rate loans; on a 20-year loan, the rate moving from 7.75% to 8.00% is the kind of shift borrowers are seeing
  • Fixed deposits: savers may get slightly better FD rates as banks adjust

What happens next

  • Next MPC meeting: 2 to 4 December 2026, with the decision announced on 4 December — the next moment your EMI can change
  • The meeting after that is scheduled for 3 to 5 February 2027
  • The RBI also pumped Rs 2.5 lakh crore of liquidity into banks, so loans may get costlier but not scarcer

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