Your Home Loan EMI May Rise From October 8, These 6 Banks Have Increased Lending Rates After RBI's Big Move

Mumbai: From October 8, 2026, six leading banks will raise their lending rates linked to the Reserve Bank of India's (RBI) benchmark repo rate, prompting borrowers with floating-rate home loans to face increased monthly Equated Monthly Instalments (EMIs). The RBI raised the repo rate from 5.25 percent to 5.50 percent on October 7, marking the first such increase since February 2023.

The central bank also revised its GDP growth forecast for the fiscal year 2026-27 from 6.7 percent to 7.1 percent, and its inflation projection from 5 percent to 5.2 percent. Six banks -- Karur Vysya Bank, Indian Overseas Bank, Punjab National Bank, Indian Bank, Tamilnad Mercantile Bank, and Bank of Baroda -- have adjusted their benchmark lending rates by 0.25 percentage points following the RBI's decision.

These banks increased their External Benchmark Repo Linked Rates and Repo Linked Lending Rates to 8.80 percent, 8.35 percent, 8.20 percent, 8.50 percent, and 5.50 percent, respectively. Borrowers with floating-rate home loans linked to these benchmarks may experience higher interest costs, with banks potentially raising monthly EMIs or extending repayment periods.

Fixed-rate borrowers are generally unaffected until their reset conditions change. The revised rates will become effective on October 8, 2026, and borrowers are advised to review their loan agreements and repayment schedules to assess the impact on their monthly payments.