is a handy table for home loan borrowers from CNBC-TV18
on how much a quarter percentage point hike can increase
home loan borrowers may soon have to shell out a couple
of thousand rupees more on their monthly EMIs. Alternately
banks give borrowers the option to increase the number
of EMI installments, which means they can increase the
duration of their loan.
how the calculation works: when interest rates increase
by a quarter percentage point, the additional amount to
be paid on a Rs10-lakh loan for 20 years is Rs1,800 per
year, an hit of Rs36,000 for the next 20 years.
if there is an increase of half a percentage point, the
EMI increase for a Rs10- lakh loan, for the same 20 year
tenure will be Rs3,600 per year.
if a customer opts to keep the EMI unchanged, the duration
of the loan will increase by 6 to 7 months on a 20-year
loan, if there is a hike in rates by a quarter percentage
point. EMIs will go up by 12 months if rates rise by half
a percentage point.
far banks have, on an average raised interest rates by
2 percentage points since June 2005. This means the monthly
EMI on a Rs10-lakh loan for a 20 year tenure would have
gone up by Rs1200 and his total outgo over 20 years will
be over Rs2.5 lakh.
the customer choses to increase the number of EMIs instead,
he would be paying 48 to 54 more EMIs. For some this could
mean they will be paying EMIs even after their retirement.