The repo rate is the policy rate under the Reserve Bank’s liquidity adjustment facility. Banks borrow short-term funds from the Reserve Bank against government securities at this rate. When it moves, the cost of money in the banking system moves with it. Your home loan does not automatically become this number.
From 7 October 2026 the repo rate is 5.5%. The Reserve Bank raised it from 5.25% with immediate effect. A repo-linked home loan is usually the repo rate plus a spread the bank set for you. The spread depends on the loan, the amount, and the bank’s card. It is written in the sanction letter. A fixed-rate loan does not follow the repo rate until the fixed period ends.
Finfod’s home-loan tools start at 8.25%. That sits 2.75% above the repo rate of 5.5%, and inside SBI’s retail home-loan card of 7.5% to 8.8% from 15 October 2026. It is a starting point so the form is not blank. It is not your rate, and it is not a forecast of the next policy meeting.
When a repo-linked rate changes, the bank can change the EMI or the number of months left. Read the reset clause. The calculator will not invent the next quarter’s repo rate for you.
A worked example
At the starting home-loan rate of 8.25%, a loan of ₹50,00,000 for 20 years has an EMI of ₹42,603. Total interest is ₹52,24,892.
If the loan were priced at the repo rate itself, with no spread, the EMI would be lower. Banks do not lend home loans at a zero spread. The 2.75% gap between 5.5% and 8.25% is the illustration. Replace 8.25% with the rate on your letter and run the EMI calculator again. The rent versus buy and prepay versus invest tools share this starting rate so the three pages do not quietly assume three different loans.
Mistakes people make
- Telling a friend your loan is “at repo” when it is repo plus a spread.
- Leaving last year’s rate in the calculator after a reset.
- Expecting the EMI to change on the day of the monetary-policy announcement. The contract has a reset date.
- Using the repo rate as an expected return on a SIP. They are different numbers from different institutions.
- Deducting more home-loan interest because the repo rate rose. The old-regime cap is still ₹2,00,000.
The source
The rate of 5.5% is the Reserve Bank’s notification effective 7 October 2026. It is not a section of the Income-tax Act. The tax cap on self-occupied interest remains section 22(1)(b) (this was section 24(b)). The EMI guide shows what to do with the rate once you have it.
Questions
Is my home-loan rate the repo rate?
Not usually. From 7 October 2026 the repo rate is 5.5%. The calculator’s starting home-loan rate is 8.25%, which is 2.75% above that repo rate, and inside SBI’s card of 7.5% to 8.8%.
Does a repo change rewrite my EMI the same day?
A repo-linked loan resets on the dates in your agreement, not on the evening of the RBI press note. The EMI calculator does not guess the next move. Type the rate from the latest reset.
Does the repo rate change my tax?
No. The repo rate is not a tax rate. The tax on home-loan interest, in the old regime, is still capped at ₹2,00,000 under section 22, whatever the repo rate is.
Sources
Figures checked 28 Oct 2026.