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After the central bank's first rate increase since February 2023, existing home loan borrowers may see either a higher monthly instalment or a longer repayment period when their loan rate resets. "We do expect that floating home rates will be repriced and higher construction costs will be passed onto the buyers, with mid-segment affordability likely to remain under the scanner," said Lata Pillai, senior MD and head, Capital Markets, India, JLL. Also Read: Sharper, bigger RBI moves coming in December? SBI economists put things in perspective According to her, the pace and extent of further rate hikes are likely to matter more to the overall market than a single 25 bps rate hike. If further rate hikes could be avoided, the demand dent is expected to be minimal. "Demand fundamentals remain strong and a robust GDP growth, growing investments and a healthy construction sector are likely to absorb the negative impact," Pillai said. While overall credit climbed more than 19% in the first five months of FY27, RBI data published earlier showed secured retail credit - particularly of homes and borrowings against pledged gold - has exceeded loan demand in other consumer discretionary categories. Also Read: Reserves drop as FCNR inflows dry, RBI dollar sales continue Together with corporate loans, retail borrowing is at the vanguard of incremental credit growth in India, where outstanding system-level loans climbed to ₹224 lakh crore at the end of August. The monetary policy committee (MPC) voted unanimously for the increase and adopted a stance of "calibrated tightening". RBI Governor Sanjay Malhotra said rate cuts were off the table for now, leaving a further increase or a pause as the choices at future meetings. The impact on existing borrowers will depend on the benchmark in their loan agreement. Banks must reset rates on loans linked to an external benchmark at least once every three months. A repo-linked home could therefore become more expensive at its next reset if the bank passes on the full increase. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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