With the hike in repo rates, the affordable housing segment, which was already reeling under inflationary pressure, is set to face another challenge as interest on home loans will rise and homebuyers might face affordability issues, say industry experts.
The Central bank hiked the repo rate for the sixth time in a row, by 25 bps to 6.5 per cent on Wednesday. This hike will translate into higher equated monthly instalments (EMIs) on new home loans. With the cost of funding rising continuously, most banks and housing finance companies are expected to increase home loan rates.
For existing borrowers, the tenure will increase and will result in a higher interest burden. But if the limit on the tenure gets breached,