Mortgage financing company Housing Development and Finance Corporation (HDFC) on Saturday, May 7, hiked its retail prime lending rate (RPLR), on which its Adjustable Rate Home Loans (ARHL) are benchmarked. The new rates, an increase of 30 basis points, will be effective from May 9, Monday, HFDC has said. The move by the lender comes close in heels with the Reserve Bank of India‘s (RBI) decision to increase its interest rates by 40 basis points or 0.40 per cent in the wake of rising inflation in India.
HDFC increases its Retail Prime Lending Rate on Housing Loans, on which its Adjustable Rate Home Loans are benchmarked by 30 basis points with effect from May 09, 2022. pic.twitter.com/cOoBoIM1Q8— ANI (@ANI) May 7, 2022
The lender had recently hiked the same rates by 5 basis points, days prior to the repo rate hike amid inflation concerns. After the change, borrowers with a credit score of over 750 will get loans at 7 per cent in case of adjustable-rate home loans, versus the 6.70 per cent earlier. This will be applicable to women borrowers. For loans in other categories and customers, the rates will range from 7.05 per cent to 7.45 per cent.
ARHL is a loan that has a floating or variable interest rates. HDFC goes by a three-month cycle for adjusting its loan rates to existing borrowers. Therefore, the lender will reprice the loans on the basis of the date of the first disbursement for different customers.
Here are the Revised Adjustable Rate Home Loans for Credit Score of Rs 750 Plus (Effective from May 9 Onwards):
i) For loans of up to Rs 30 lakhs, female customers will be charged an interest rate of 7 per cent, as opposed to the 6.70 per cent earlier, an increase of 30 basis points. For other customers, the interest rates have been hiked by 30 basis ponts to 7.05 per cent up from 6.75 per cent rate earlier.
ii) For loans above Rs 30 lakh and below Rs 75 lakh, women borrowers will have to pay an interest at the rate of 7.30 per cent, in contrast with the earlier 7 per cent. This is an increase of 30 basis points as well. For other customers, the interest rates have been hiked by 30 basis points to 7.35 per cent up from 7.05 per cent rate earlier.
iii) In case of loans above Rs 75 lakh, borrowers who are women will be required to pay an interest rate of 7.40 per cent, up from the earlier 7.10 per cent — in an increase of 30 basis points. For other customers, the interest rates have been hiked by 30 basis points to 7.45 per cent up from 7.15 per cent rate earlier.
Following the RBI’s mid-cyclic rate hike on May 4, several lenders including the ICICI Bank and Bank of Baroda hiked their external benchmark lending rates. It is anticipated that more banks will join in to hike their lending rates.