Borrowers across India might soon need to budget for higher monthly expenses. According to a new report from SBI Research, the Reserve Bank of India (RBI) is likely to raise its benchmark repo rate twice in the coming months first in October and then again in December 2026. Each hike is expected to be 25 basis points (bps), leading to a total increase of 0.50%.
The main reasons behind these expected rate hikes are rising global crude oil prices, which recently crossed $100 per barrel, and growing inflation risks across the country. Currently, the RBI repo rate sits at 5.25% after four consecutive review meetings without any changes. The upcoming Monetary Policy Committee (MPC) meeting is scheduled for October 5 to 7, 2026.
This decision will directly impact common citizens in two major ways. First, commercial banks will raise lending rates, making home loans, car loans, and personal loans more expensive. For example, if you have a floating-rate home loan of ₹50 lakh for 20 years at 8.25%, your monthly EMI of ₹42,603 could rise to approximately ₹44,186 after a full 50 bps hike. Second, there is good news for fixed deposit holders. Banks are expected to raise FD interest rates, allowing investors to lock in higher returns. While fixed rate loan holders remain unaffected, floating-rate borrowers must prepare for higher monthly outflows.
