HDFC Raises Rates for Existing Borrowers, EMIs Expected to Increase
HDFC Ltd raised its benchmark lending rate by 5 basis points on Sunday, leading to higher monthly payment equivalents (EMIs) for existing borrowers.
“HDFC is increasing its retail prime rate (RPLR) on home loans, on which its adjustable rate home loans (ARHL) are benchmarked, by 5 basis points, effective May 1, 2022,” the statement said. company in a press release.
However, there is no change in lending to new HDFC borrowers. Rates for new borrowers range between 6.70% and 7.15%, depending on credit and loan amount. For new loans (with a credit score of 750 and above), the interest rate will be 6.7%. The interest rate will be 6.8% for other new loans up to Rs 30 lakh while female borrowers will get the loan at 6.75% interest. For loans between Rs 30 lakh and Rs 75 lakh, the rate will be 7.05% while women will get it for 7%.
Interest rates are expected to rise, with the RBI now hinting at the withdrawal of accommodative monetary policy to contain inflation. While the RBI kept the Repo rate at 4% in the last policy review, key rates are expected to rise in the coming months.
The SBI last month raised the MCLR by 10 basis points (bps) across all mandates to 7.1% (from 7% earlier). It is now slightly below the 7.25% of HDFC Bank, Punjab National Bank (PNB) and ICICI Bank. Bank of Baroda, Axis Bank and Kotak Mahindra Bank increased their MCLRs by 5 basis points each across all mandates. Other public and private banks are expected to increase MCLRs in the coming days.
The MCLR, which RBI instituted with effect from April 1, 2016, is the lowest interest rate a bank or lender can offer. It applies to new business loans and variable rate loans taken out before October 2019.