HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked.
New Delhi: Housing Development Finance Corporation (HDFC), one of India's top home loans companies, has hiked home loan interest rates by 0.30 percent. The development comes days after the Reserve Bank of India increased the main policy rate, repo rate, by 40 basis points, from 4 percent to 4.40 percent. Repo rate is the interest at which the RBI lends money to banks. It is increased by the apex bank to control inflation.
"HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 30 basis points, with effect from May 9, 2022," HDFC said in a statement.
For people whose credit score is more than 750, a loan of Rs 30 lakhs would cost around 7 to 7.05% after the hike. Those with a loan of between 30-75 lakhs will pay between 7.30 to 7.35 percent interest, whereas those with a loan of Rs 75 lakhs will pay interest at a rate of 7.40-7.45 percent.
Financial institutions had started raising lending rates even before the increase in policy rates was announced by the RBI on May 4.
HDFC had hiked the Retail Prime Lending Rate by 0.05 per cent on May 2, irrespective of the loan amount.Other lenders like State Bank of India, Axis Bank, ICICI Bank and Bank of Baroda have also increased their lending rates.
On May 4, the Reserve Bank of India's Monetary Policy Committee in an unscheduled meeting decided to increase the policy repo rate by 40 basis points to 4.40 per cent with immediate effect. This was the first increase in the policy repo rate since May 2020, marking a reversal of the RBI's monetary policy stance.
In response to the COVID-19 pandemic, the monetary policy had shifted gears to an ultra-accommodative mode, with a large reduction of 75 basis points in the policy repo rate on March 27, 2020 followed by another reduction of 40 basis points on May 22, 2020.
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