Expensive EMI hits, know how the increase in RBI’s repo rate spoiled the budget of every household!

EMI Hike In 2022: The year 2022 is about to end. But this year has been in the name of inflation. The back-breaking inflation spoiled the kitchen budget of the people, and at the same time, the expensive EMI has worked as an itch on the leprosy. In the name of curbing inflation, RBI increased its policy rates repo rate five times in 7 months, as a result of which people’s EMI started skyrocketing. Income did not increase but expenditure increased.

From May 4, 2022, RBI started the process of increasing the repo rate due to increase in retail inflation. In five monetary policy meetings, the RBI increased the repo rate from 4 per cent to 6.25 per cent in different phases. That is, the repo rate was increased by 2.25 percent. As a result, those who had already taken home loans were hit the most. Banks or home finance companies from which home buyers had taken home loans, those financial institutions started increasing the interest rates on home loans. After which the EMI of the people became expensive.

Interest rates had come down a lot during the Corona period. The interest rates on home loans had come down to 6.65 per cent. The benefit of which was given to the housing sector. The demand for houses increased. Banks benefited tremendously. But in 2022, home loan interest rates took a U-turn. Now the interest rates have reached the sky, so now let us tell you how in 2022 the burden of expensive EMI has fallen on the people.

20 lakh home loan

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Suppose if someone had taken a home loan of Rs 20 lakh for 20 years at an interest rate of 6.75 per cent. Before increasing the repo rate of RBI then EMI of Rs 15,207 had to be paid. But after increasing the repo rate five times, the interest rate has reached 9 percent and the EMI has increased to Rs 17,995. Means EMI every month has now increased by Rs 2788. And annually this burden will be Rs 33,456.

40 lakh home loan

Let’s take another example. Suppose if someone had taken a home loan of Rs 40 lakh at an interest rate of 7.25 per cent for 15 years, then before the increase in the repo rate, he had to pay an EMI of Rs 36,515. But now this interest rate has increased to 9.50 percent. The EMI has increased to Rs 41,769. Means EMI has increased by Rs 5254. EMI will have to be paid more annually by Rs 63,048.

Will there be relief from expensive EMI in 2023!

EMI has become expensive in the year 2022. But the question arises whether there will be relief from expensive EMI in 2023 when the process of decline in retail inflation has started. In the month of November, the retail inflation rate has come down to 5.88 percent. And it is believed that there may be further reduction in 2023. After which people can get relief from expensive EMI.

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