HDFC hikes retail prime lending rate on home loans, EMIs to become expensive

HDFC has hiked its Retail Prime Lending Rate (RPLR) on housing loans from Monday (August 1), making the loan costlier for new and existing borrowers, including equal monthly installments. Its Adjustable Rate Home Loan (ARHL) is benchmarked at 25 basis points on RPLR.

“HDFC has increased its Retail Prime Lending Rate (RPLR) on housing loans, including its Adjustable Rate Home Loan (ARHL) by 25 basis points, with effect from August 1, 2022,” the housing finance company said in a statement. is implemented,” the housing finance company said in a statement. .

The move comes ahead of the RBI’s Monetary Policy Committee (MPC) meeting next weekend. The MPC raised the key repo rate by 50 basis points (bps) in its previous policy review in June, the second hike in nearly a month after raising it by 40 basis points in an off-cycle policy review in May. Retail inflation stood at 7.01 percent in June, slightly lower than the 7.04 percent recorded in May but above the RBI’s target range of 2-6 percent. In the next policy review as well, the MPC is expected to hike the repo rate.

This is the fifth hike by HDFC since May. A total of 115 bps has been added in two months. The revised rates for new borrowers are between 7.80 percent and 8.30 percent, depending on credit and loan amount. The current range is 7.55 percent to 8.05 percent. For existing customers, rates will increase by 25 basis points or (0.25 percent).

HDFC follows a 3 month cycle to repay its loans to existing customers. Therefore, the loans will be revised in sync with the increased loan rate based on each customer’s first payment date.

According to the lender’s website, its home loan interest rate/EMI is applicable to loans under the Housing Development Finance Corporation Limited (HDFC) Adjustable Rate Home Loan Scheme and is “subject to change at the time of disbursement”. . Home loan interest rates are linked to HDFC’s benchmark rate – RPLR – and are variable throughout the loan tenure. All loans are at the discretion of HDFC Ltd.

Lenders including Bank of Baroda, Kotak Mahindra Bank and PNB have been raising both deposit and lending rates for the past two months after the MPC hiked key repo rates to control inflation in the country. .

Apart from loans, FD rates are also increasing in the country. This week, private sector lender DBS Bank India hiked interest rates on fixed deposits (FD) for funds below Rs 2 crore. The new prices have come into effect from Thursday (July 28). The lender has increased the interest rates over time. It now offers interest rates in the range of 2.5-6.25 percent for general public and 3-6.75 percent for senior citizens.

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