Housing finance provider HDFC Ltd on September 30 hiked its lending rate by 50 basis points following the decision of the Reserve Bank of India (RBI) to raise the policy repo rate by 50 basis points (bps) to 5.9 percent. This is the seventh rate hike implemented by HDFC in the last five months.
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The new lending rate comes into effect from October 1, 2022, HDFC said in a statement.
The home loan interest rate applies to loans for purchasing a new house, home renovations, home expansions and balance transfers. These rates are flexible during the loan’s term and are determined by HDFC's benchmark Rate ("RPLR").
Following the rate hike announcement, both existing and new borrowers will now have to pay EMI 0.50 percent higher than earlier.
On September 30, the RBI upped policy interest rates by half a point to fight price pressures. The move is set to make borrowing expensive, leading to an increase in loan tenure and higher equated monthly instalments (EMIs). At the same time, the rate hike is expected to hike interest rates on deposits like fixed deposit (FD).
Earlier, following the 50 basis points repo rate hike by the RBI in its August monetary policy meet, several lending institutions increased their loan interest rates, including the State Bank of India, ICICI Bank, Bank of Baroda, Canara Bank, and the Punjab National Bank.
The State Bank of India (SBI) raised its external benchmark from August 15 to 8.05 percent +CRP+BSP from 7.55 percent+CRP+BSP. The external benchmark lending rate is repo rate and a spread plus a credit risk premium which is based on the individual’s credit score. SBI’s repo linked lending rate was raised to 7.65 percent+CRP from 7.15 percent+CRP.
ICICI Bank
ICICI Bank’s External Benchmark Lending Rate was raised to 9.10 percent from August 5.
Bank of Baroda
Bank of Baroda increased its repo linked lending rate from August 6 to 7.95 percent.
Canara Bank
Canara Bank hiked its repo rate-linked lending rate by 50 basis points from 7.80 percent to 8.30 percent from August 7.
Punjab National Bank
PNB hiked the repo, the external benchmark, linked lending rate to 7.90 percent from 7.40 percent from August 8.
Indiabulls Housing Finance
Indiabulls Housing Finance raised its reference rates for all loans by 10 basis points from September 15. The new rates were applicable to new customers and existing borrowers. Following the change, the interest rate for borrowers and co-borrowers with a loan amount up to Rs 35 lakh started at 8.70 percent. Earlier in August, the Gurugram-based non-banking finance company raised its interest rates by 25 basis points across tenors on housing loans and MSME loans.
