"It is important to understand that a 2.5 per cent hike implies that the EMIs 9 equated monthly instalments) have gone up by approximately 16 per cent in the case of a 15-year loan, 20 per cent in the case of a 20-year loan, and 26.5 per cent in the case of a 30-year loan. This will have an impact on the eligibility of the borrowers and hence their purchasing power. For existing borrowers, this means higher EMIs, longer tenors, and in most cases, both at once. Many borrowers, especially those at the beginning of their loans have seen their tenors increase instead of decrease over the last one year despite timely repayments. At the same time, spreads on the benchmark rate have been falling over the last year, from 3.5 per cent before the pandemic to 1.9 per cent currently," says Adhil Shetty, CEO of BankBazaar.com.