Loans set to get dearer as RBI hikes repo rate after 44 months

MUMBAI: In a move that could hurt consumption during the festive season, mortgages and other loans are set to become more expensive, while deposits will start yielding higher returns in a few weeks, with Reserve Bank of India Wednesday announcing a hike in key interest rates.RBI raised the repo rate by a widely expected 25 basis points to 5.5% on Wednesday, its first increase since Feb 2023, as stronger than expected growth and broader price pressures due to escalation of the West Asia conflict prompted the Monetary Policy Committee to unanimously vote for an increase and shift its stance from neutral to "calibrated tightening".The move will raise the EMI on a Rs 1 crore loan over 15 years by around Rs 1,500 a month, or about Rs 1,471 at a base rate of 8.5%.If EMI remains unchanged, the higher rate could extend the loan by about 5.5 to 5.9 months,…