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Prepay at least 5% of your home loan each year to tackle rising rates

With rates cuts unlikely anytime soon, debt mutual fund investors should avoid duration calls

Home Loan EMI
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Sanjay Kumar Singh New Delhi
The Reserve Bank of India (RBI) hiked the repo rate by 25 basis points in its monetary policy review of February 8. The repo rate now stands at 6.5 per cent, up 250 basis points since the start of the rate hike cycle in May 2022.  

Most experts believe we have reached the terminal rate in the current rate hike cycle. However, there are a few caveats. Says R Sivakumar, head-fixed income, Axis Mutual Fund: “While we believe we are at the peak of policy rates, inflation and US Federal Reserve action can be wild cards for market participants.”

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