Simple Save Podcast | RBI repo rate hike: Make part-prepayments, increase EMIs to cushion interest rise impact

Home loan interest burden is set to increase post the RBI’s repo rate hike of 25 basis points on February 8. The RBI has, since May 2022, increased the key policy rate by 250 basis points since May 2022. Consequently, equated monthly installments (EMI) per lakh have risen 20-25 percent since the start of this rising rate cycle. Borrowers can take some steps at their end to reduce the total interest payable over the loan tenure. Look at making lump-sum part-prepayment to reduce the interest outgo. You can liquidate your low-yielding investments such as endowment policies to arrange this sum. You can also voluntarily increase EMIs, your cashflow permitting and switch lenders if you find better deals, says Vipul Patel, Founder, Mortgageworld, a mortgage advisory firm. Tune into Simply Save for details.