HDFC hikes lending rate by 50 bps; EMIs to go up
Leading housing finance provider HDFC Ltd. upped its lending rate by 50 basis points on Friday after the Reserve Bank of India (RBI) hiked the policy repo rate by 50 basis points (bps) to 5.9% in its Monetary Policy Committee (MPC) held on Friday. In the last five months, HDFC has implemented a total of seven rate hikes.
“HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 50 basis points, with effect from October 1, 2022,” the company said in a statement.
The interest rates on home loans are available from HDFC Limited starting at 8.10% p.a. This interest rate is applicable to loans for purchasing a new house, balance transfers, home renovations, and home expansions. The above-mentioned home loan interest rates are flexible during the loan’s term and are determined by HDFC’s benchmark Rate (“RPLR”). Both new and existing borrowers will now be required to make EMI payments that are 0.50% higher due to the corporation raising its key lending rate.
On September 30, the Reserve Bank of India (RBI) announced a 50 basis point increase in the repo rate, the fourth such increase since May. The cost of funds for banks and financial institutions would be increased soon as a result of the repo rate, and more banks and financial institutions are anticipated to follow. Meanwhile, as a result of the increase in the repo rate, both current and new loan borrowers would be required to make higher equivalent monthly installments (EMIs) for their car and home loans because it will now cost banks and lending companies higher to borrow funds.
