New Delhi, Oct. 10 -- The Reserve Bank of India's (RBI) latest monetary policy review marks a shift to "calibrated tightening", with a 25-basis-point increase in the repo rate to 5.50%. The repo rate is the rate at which RBI lends to banks; an increase typically pushes up lending rates. The widely anticipated move comes as inflation inches upwards and interest rates rise globally. Further hikes remain possible.

For households, borrowing is set to become costlier. Existing borrowers with floating-rate home loans can expect higher rates when their loans reset. The impact may not show up immediately in monthly payments because lenders typically extend the repayment period to keep EMIs unchanged. But a longer tenure further increases the tot...