The policy repo rate is 5.50 per cent. The Reserve Bank of India's Monetary Policy Committee raised it by 25 basis points to 5.50 per cent at its meeting held from 5 to 7 October 2026, and changed the stance to calibrated tightening. The RBI's minutes, published on 21 October 2026, record the resolution as unanimous.
What changed
The table uses only the figures in the RBI minutes. Where the minutes do not restate the earlier level, the cell says so.
| Item | Before | After | Effective |
|---|---|---|---|
| Policy repo rate under the LAF | 5.25 per cent (5.50 less 25 basis points) | 5.50 per cent | MPC decision, meeting of 5 to 7 October 2026 |
| Standing deposit facility (SDF) rate | Not stated in the minutes | 5.25 per cent | Same meeting |
| Marginal standing facility (MSF) rate and Bank Rate | Not stated in the minutes | 5.75 per cent | Same meeting |
| Stance | Neutral | Calibrated tightening | Same meeting |
The minutes give no separate effective date, so the table uses the meeting itself. The next MPC meeting is scheduled for 2 to 4 December 2026.
Try it: Home Loan EMI Calculator takes the loan amount, rate and tenure and shows your EMI and the repayment schedule. Enter your own rate, then enter a rate 0.25 points higher to see the difference.
Who it affects
Borrowers with a floating rate home loan are the group most affected by a change in the repo rate, because their rate moves when the lender resets it under the loan agreement. A fixed rate loan keeps its agreed rate for the fixed period. The minutes do not say how any lender passes the change on, so check your own loan letter for the reset clause and the reset date.
Worked example: Rs 30 lakh over 20 years
The example assumes a loan of Rs 30,00,000 for 20 years (240 monthly instalments) at 8.50 per cent and at 8.75 per cent. These are round, labelled assumptions, not any lender's rate. The 25 basis point difference is the same size as the policy change.
EMI Rs 26,511Total interest Rs 33,62,717
Worked example: EMI on a Rs 30 lakh, 20 year loan at two assumed rates, not any lender's rate. Calculation only, no live data.
| Step | Working | Value |
|---|---|---|
| Loan amount (assumed) | Rs 30,00,000 | |
| Tenure | 20 years x 12 | 240 instalments |
| Monthly rate at 8.50% | 8.50 / 12 / 100 | 0.00708333 |
| EMI at 8.50% | P r (1+r)^n / ((1+r)^n - 1) | Rs 26,034.70 |
| Monthly rate at 8.75% | 8.75 / 12 / 100 | 0.00729167 |
| EMI at 8.75% | P r (1+r)^n / ((1+r)^n - 1) | Rs 26,511.32 |
| Monthly difference | 26,511.32 - 26,034.70 | Rs 476.62 |
| Yearly difference | 476.62 x 12 | Rs 5,719.44 |
Example figures, not today's rates.
Over 20 years, total interest on the example is about Rs 32.48 lakh at 8.50 per cent and about Rs 33.63 lakh at 8.75 per cent (EMI multiplied by 240, less the loan). The gap is about Rs 1.14 lakh.
What to do
- Open your home loan agreement and find the interest rate reset clause, including the benchmark and how often the rate resets.
- Ask your lender in writing which benchmark applies to your loan and when your rate was last reset.
- Run your loan amount, rate and tenure in the Home Loan EMI Calculator to see the EMI at a higher rate.
- Check the repayment schedule in the EMI Calculator to see how much of each instalment goes to interest in the early years.
- Note the next MPC meeting, 2 to 4 December 2026, and read the RBI press release after it.
What the minutes say about the outlook
The minutes project CPI inflation at 5.2 per cent for 2026-27 and real GDP growth at 7.1 per cent for the same year. CPI inflation was 4.8 per cent in August 2026, up from 4.5 per cent in July. These are the RBI's projections, and they are not a view on where the repo rate goes next.
What has not changed
The minutes say that, given current conditions, rate cuts are off the table in the near term, and that policy action ahead can only be a rate hike or a pause, depending on the evolving conditions and the outlook. How long and how far the hike cycle runs depends on growth and inflation, the minutes add. They do not set a timetable.
Common mistakes
- Treating the repo rate as your loan rate. The repo rate is the policy rate under the liquidity adjustment facility (LAF). Your loan rate follows your loan contract.
- Comparing only the EMI. A longer tenure lowers the EMI but raises the total interest paid, and the schedule in the EMI calculator shows both.
Related reading: our note on the RBI's overnight variable rate repo auction of 21 October 2026 is at this link, and our note on the GST Council's 57th meeting is at this link.
