Indiabulls Housing Finance (IBHFL) on Thursday said it would increase the reference rates for all loans by 10 basis points with effect from Thursday, September 15. The revised reference rates will be applicable for new customers and will be effective from the next payment cycle of October for existing borrowers.
The company said the interest rate for borrowers and co-borrowers with a loan amount up to Rs 35 lakhs would start at 8.70 percent.
Earlier, IBHFL increased its lending rates by 25 basis points which came into effect from August 1 for new customers and August 5 for existing customers. In a press release on August 4, Indiabulls announced an increase in interest rates on home loans by 20 basis points.
The Reserve Bank of India has increased the repo rate by 140 bps to 5.4 percent so far in the current financial year. A 50 bps increase was announced in the August review. RBI norms require banks to review their monthly lending rates based on the marginal cost of funds.
When RBI hikes its repo rate, it increases the cost of funds for banks. As a result, banks are required to pay more for the money they borrow from the central bank. The lenders then pass on the cost to borrowers by increasing their loan interest rates, making EMIs costlier.
Both new and existing borrowers witness an increase in their loan interest rates.
First Published: Sept 15, 2022 9:24 AM IST
