HDFC increases home loan interest rates; Details inside

New Delhi: The Mortgage financing company, Housing Development, and Finance Corporation (HDFC) on May 7 increased its retail prime lending rate (RPLR) on which its Adjustable Rate Home Loans (ARHL) are benchmarked. According to HDFC, the new rates will witness an increase of 30 basis points which will become effective from May 9. This move by the lender is in association with the Reserve Bank of India’s (RBI) decision to increase its interest rates by 40 basis points or 0.40% 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

Recently, the lender hiked the same rates by 5 basis points. This happened days before the repo rate hike in the middle of inflation concerns. Following the change, borrowers with a credit score of more than 750 will get loans at 7% only on adjustable-rate home loans, versus the 6.70% earlier. Moreover, this will apply to women borrowers as well. For loans in other categories and customers, the rates will range from 7.05% to 7.45%.

Notably, ARHL is a loan that has floating and variable interest rates. HDFC goes by a three-month cycle for adjusting its loan rates to existing borrowers. Thus, the lender will reprice the loans on the basis of the date of the first disbursement for different customers.

Take a look at the revised adjustable rate home loans for credit score of Rs 750 plus

1. For loans up to Rs 30 lakh, female customers will have to pay an interest rate of 7%, unlike the 6.70% earlier, which results in an increase of 30 basis points. However, for other customers, the interest rates have been hiked by 30 basis points to 7.05% up from the 6.75% rate earlier. 
2. For loans between Rs 30 lakh and Rs 75 lakh, women borrowers will be charged interest rates of 7.30%, contrary to the earlier 7%. This also experienced an increase of 30 basis points. For other customers, the interest rates have been surged by 30 basis points to 7.35% up from the 7.05% rate earlier.
3. For loans above Rs 75 lakh, female borrowers will be required to pay an interest rate of 7.40%, in contrast to 7.10% earlier, an increase of 30 basis points. For other customers, the interest rates have been increased by 30 basis points to 7.45% up from the 7.15% rate earlier.

After RBI’s mid-cyclic rate hike on May 4, several lenders like the ICICI Bank and Bank of Baroda surged their external benchmark lending rates. It is expected that more banks will join in to hike their lending rates.