New Delhi, Oct. 19 -- A rise in home loan interest rates presents borrowers with a choice that can affect their finances for years. They can increase their equated monthly instalment (EMI) to repay the loan faster, or extend the repayment tenure to keep monthly outgo under control. While the second option offers immediate relief, it can increase the total interest paid over the life of the loan.

The right decision depends on a borrower's income stability, existing financial commitments, savings and the number of years remaining on the loan, said Mehernosh Tata, managing director and chief executive officer of Godrej Housing Finance.

"Those with stable income and sufficient room in their monthly budget may consider increasing the EMI to ...