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Home Loan EMI set to rise

Banks have got lots of customers over the last 12 months or so because of the teaser rates. But as base rate comes into effect and teaser rates goes away, the EMI of home loans look set to rise. Even with the teaser rates, the rate was applicable for only a year and then there was 50 to 100 basis points increase depending on bank policy. A couple of years down the line, the loan taker was supposed to be on a market floating rate.

Looking at the above policy itself, it seems evident that interest rates are likely to go up as banks are expecting high interest rates. Also, the high inflation is not helping either. If the interest rates increase, it will be bad news for the home loan takers as their EMIs will increase. However, it may be good news for the depositors as they will get better interest on their investment.

Most of the banks will increase the interest rates 50 to 75 basis points over the next few months. Time to try and repay the loan as soon as possible!


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