News report

Home loans would cost more after a 25 basis point increase in lending rates by HDFC

The mortgage lender, HDFC Ltd. raised its benchmark lending rate by 25 basis points on Saturday, making loans more expensive for current and potential consumers.

Ahead of the RBI’s Monetary Policy Committee (MPC) meeting scheduled for next week, the rate was raised. The interest rate hike committee is generally planned in order to control extreme inflation.

According to a company statement, “HDFC is increasing its Retail Prime Lending Rate (RPLR) on home loans, on which its adjustable rate home loans (ARHL) are referenced, by 25 basis points (bps), effective August 1, 2022.”

Over the past two months, HDFC has implemented five price increases. Since May of this year, the rate has risen 115 basis points overall.
Depending on the credit and loan size, discount rates for new borrowers vary between 7.80% and 8.30%. Currently, the range is 7.55% to 8.05%.

For current customers, rates will increase by 25 basis points or (0.25%).

For its loans to current customers, HDFC uses a three-month period. Accordingly, loans will be updated in accordance with the high loan rate based on the date of each client’s initial disbursement.

After the RBI announced repo rate increases of 40 basis points and 50 basis points, respectively, in May and June, financial institutions went on an interest rate hike frenzy.