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HDFC raises home loan interest rates


MUMBAI: HDFC Bank has raised its retail prime lending rate by 30 basis points, increasing the cost of borrowing for all floating rate home loan customers. The hike, effective May 9, follows the RBI pushing up on May 4 key policy rates by 40 basis points (100 basis points=1%).
HDFC’s interest rate for woman borrowers on loans up to Rs 30 lakh will now stand revised at 7%, on loans between Rs 30 to Rs 75 lakh at 7.3%, and loans above Rs 75 lakh at 7.4%. The interest rate is five basis points higher for borrowings where a woman is not part of the loan agreement.
For banks, the interest rates on their home loan portfolio automatically rise with an increase in the repo rate. Almost all banks have linked their floating home loan rate to the RBI’s repo rate. Older loans benchmarked to the marginal cost of lending rate are also rising, but more gradually as these are revised every month. Canara Bank is the latest to announce a 10 basis points increase in its MCLR rates across maturities.
Punjab National Bank has increased its fixed deposit rates (for deposits below Rs 2 crore) by 10-20 basis points across maturities. In the case of deposits between Rs 2 crore to Rs 10 crore, the bank has increased interest rates on 30-45 FDs by 60 basis points to 3.5%.
HDFC’s 30 basis points increase will result in the equated monthly instalment on 20-year home loans of Rs 1 crore going up by Rs 1,791. The latest revision marks an end to the sub-7% home loan rates that had been prevailing in the two years following the Covid outbreak.





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