SBI vs BoB vs PNB vs BOI customers: How much will your home loan EMIs increase after repo rate hike

How much will EMIs increase?

The rate hike of 25 bps will make EMIs expensive by approximately 2-4 per cent.

Following the RBI hike, the State Bank of India, Bank of Baroda, Bank of India, Punjab National Bank, and Indian Overseas Bank are the lenders that have increased their lending rates.

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State Bank of India (SBI) home loan rate EMI calculation

In May 2022, if a person had taken a loan of ₹30 lakh from the SBI for ten years. The interest rate was 6.65 per cent, and the EMI they would need to pay the bank would amount to ₹34,294.

After the rate hike by SBI in February, at an interest rate of 9.15 per cent, the person will now have to pay an EMI of ₹38,247 on the same loan.

This means their EMI has jumped by ₹3,953 per month.

Bank of Baroda (BoB) home loan rate EMI calculation

In May 2022, a person wished to take a loan of ₹30 lakh from the Bank of Baroda for ten years.

Assuming the interest rate was 7 per cent, and the EMI they would need to pay the bank would amount to ₹34,833

After the rate hike announced by the bank in February, at an interest rate of 8.55 per cent, the person will now have to pay an EMI of ₹37,276.

This means their EMI has jumped by ₹2,443 per month.

Bank of India (BoI) home loan rate EMI calculation

According to the Bank of India website, “The effective RBLR w.e.f 08.02.2023 is 9.35% as per the revised Repo rate (6.50%).

In May 2022, a person wished to take a loan of ₹30 lakh from the Bank of India for ten years.

Assuming the interest rate was 7 per cent, and the EMI they would need to pay the bank would amount to ₹34,833

After the rate hike announced by the bank in February, at an interest rate of 9.35 per cent, the person will now have to pay an EMI of ₹37,276.

This means their EMI has jumped by ₹3,740 per month.

Punjab National Bank (PNB) home loan rate EMI calculation

According to the PNB website, “The RLLR has been changed from 8.75% to 9.00% {Repo Rate (6.50%) + Mark-up (2.50%)} w.e.f. 09-02-2023 for all customers. Along with RLLR BSP of 25 bps will be charged.”

In May 2022, a person wished to take a loan of ₹30 lakh from PNB for ten years.

Assuming the interest rate was 7 per cent, and the EMI they would need to pay the bank would amount to ₹34,833

After the rate hike announced by the bank in February, at an interest rate of 9 per cent, the person will now have to pay an EMI of ₹38,003.

This means their EMI has jumped by ₹3,740 per month.

Indian Overseas Bank (IOB) home loan rate EMI calculation

According to the Indian Overseas Bank, “Bank has revised the RLLR lo 9.357″ (i.e. 6.50% + 2.857. = 9.357″) with effect from 08.02.2023″

In May 2022, a person wished to take a loan of ₹30 lakh from Indian Overseas Bank for ten years.

Assuming the interest rate was 7 per cent, and the EMI they would need to pay the bank would amount to ₹34,833

This means their EMI has jumped by ₹3,170 per month.

Increase home loan EMIs or tenure: What should borrowers do?

According to Archit Gupta, Founder, and CEO, of Clear, in case there is an increase in EMI due to an increase in interest rate, at first, the borrower can negotiate with the bank for a lower rate, even a few basis points can reduce the burden for you. In case the higher EMI is causing a strain on your monthly budget, it may be better to extend the tenure of the loan so that you can reduce the monthly EMI burden, however, by doing this, you will end up paying an extra interest component.

If the borrower can reduce expenses or generate an additional income to reduce outstanding loans that could be a better option in this rising rate scenario, rates have been rising in the recent past, Gupta added.

What should borrowers do?

Pankaj Mathpal of Optima Money Managers said that banks don’t increase monthly EMI but raise the tenure of repayment. Though it is always advisable to repay the loan as soon as possible. So, a home loan borrower is advised to visit one’s bank branch and enquire about the impact on one’s monthly home loan EMI post-interest rate hike.