RBI raises repo rate by 25 bps to 5.50%: home loan EMIs in NCR set to rise

By ADiHomes Published October 7, 2026 2 min read

Watercolour illustration of a couple reviewing a loan statement at night

Contents

What the RBI decided

On 7 October 2026 the Reserve Bank of India’s Monetary Policy Committee voted to raise the policy repo rate by 25 basis points, from 5.25% to 5.50%. It is the first increase since February 2023 and ends the pause that followed the December 2025 rate cut. The committee also changed its stance from neutral to calibrated tightening, which signals that further cuts are not expected in the near term.

Standing Deposit Facility: 5.25%
Marginal Standing Facility and Bank Rate: 5.75%
Next MPC meeting: early December 2026

The RBI cited inflation risks; it expects inflation to average close to 5.8% over the next three quarters.

What it means for NCR home buyers

Most new home loans since October 2019 are linked to an external benchmark, usually the repo rate. When the repo rises, the bank’s lending rate on those loans rises at the next reset date, typically within a quarter.

Rough impact

For a Rs 1 crore loan over 20 years, a 0.25 percentage point increase adds roughly Rs 1,500-1,600 to the monthly EMI, or extends the tenure if the bank keeps the EMI fixed. Larger tickets common in Gurugram and Noida luxury projects see proportionally bigger increases.

Effect on the market

Under-construction buyers paying through construction-linked plans will see higher pre-EMI interest as disbursements continue.
Buyers who were waiting for cheaper loans may push decisions further, which could slow mid-segment sales in Greater Noida West, Raj Nagar Extension and New Gurugram.
Developers are likely to respond with payment-plan offers rather than headline price cuts, especially in the festive season.

What to check

Your loan’s reset date and benchmark (repo-linked, MCLR or base rate).
Whether the bank will raise your EMI or extend your tenure by default; you can usually ask for the option you prefer.
If you are on an old MCLR loan, compare the cost of switching to a repo-linked loan, including fees.
Read “subvention” or “no EMI till possession” offers carefully – liability for interest stays with the borrower if the developer stops paying.

Buyers who are close to booking should also ask lenders about fixed-rate options for the first few years; some banks and housing finance companies offer them, usually at a premium to floating rates.