Mortgage lender HDFC Ltd announced on Saturday an increase in its benchmark interest rate by 30 basis points (bps), a move that will make loans more expensive for both existing and new borrowers.
The move comes just days after several lenders, including ICICI Bank, Bank of Baroda and Bank of India, raised interest rates following the Reserve Bank of India’s surprising repo rate hike on Wednesday.
“HDFC is raising its Retail Prime Lending Rate (RPLR) on home loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 30 basis points, effective May 9, 2022,” the home finance company said in a statement. †
The revised rates for new borrowers range between 7 percent and 7.45 percent, depending on the credit and amount borrowed. The existing range is 6.70 percent to 7.15 percent.
For existing customers, rates would increase by 30 basis points or (0.3 percent).
Earlier this month, HDFC had raised its benchmark interest rate by 5 basis points, making EMI expensive for existing borrowers.
HDFC is on a 3-month cycle of re-pricing its loans to existing customers. The loans will thus be revised in accordance with the increased borrowing rate based on the date of the first disbursement.
Financial institutions are in the process of raising interest rates following an increase in the repo rate and the cash reserve ratio (percentage of the total deposit of the banks held with the RBI) by 40 basis points and 50 basis points respectively announced by the RBI earlier this week.
After an out of turn meeting of the Monetary Policy Committee (MPC), the Reserve Bank on Wednesday raised its benchmark repo rate — the short-term interest rate it charges banks — by 0.40 percent to 4.40 percent effective immediately, targeting to tame rising inflation.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)