Archive · 6 Oct 2026
25-Basis-Point Rate Rise Could Add ₹2.45 Lakh to Home-Loan Interest
A home loan costs more when its interest rate rises.
The article gives an example of someone borrowing ₹50 lakh for 25 years.
At 7.5% interest, their monthly payment is about ₹36,950.
If the rate goes up by 0.25 percentage points, the payment could rise by about ₹817 each month if the loan still ends on the same date.
That could add about ₹2.45 lakh in interest over the full loan.
Some lenders may increase the monthly payment, extend the time to repay, or do both.
The exact change depends on the loan and the lender.
Borrowers can ask their lender about the change and may pay extra or make partial repayments to reduce the cost.
For a ₹50 lakh home loan at 7.5% over 25 years, the estimated EMI is about ₹36,950.
A 25-basis-point rate increase could raise the monthly EMI by roughly ₹817 to around ₹37,767, assuming the tenure stays unchanged.
The higher EMI would mean about ₹9,800 in additional repayments a year and an estimated ₹2.45 lakh in extra interest over 25 years.
The actual effect depends on the outstanding loan, remaining tenure, lender reset policy and how much of the rate change is passed on.
Borrowers can ask lenders about reset terms and consider higher EMIs or partial prepayments to limit long-term interest costs.
- Who
- Home-loan borrowers, particularly those with repo-linked loans.
- What
- A 25-basis-point rate increase could raise the cost of a ₹50 lakh, 25-year home loan by an estimated ₹2.45 lakh in interest.
- When
- The article discusses the potential effect of a rate increase; no date is specified.
- Where
- India.
- Why
- A higher lending rate can increase EMIs, extend repayment tenure, or both, raising borrowing costs over time.
- Example loan principal
- ₹50 lakh
- Example interest rate
- 7.5%
- Example tenure
- 25 years
- Estimated current EMI
- About ₹36,950 a month
- Rate increase modeled
- 25 basis points
- Estimated EMI after increase
- About ₹37,767 a month, assuming the tenure is unchanged
- Estimated additional interest
- Approximately ₹2.45 lakh over 25 years