HDFC hikes home loan rates by 0.75%

HDFC hikes home loan rates by 0.75%

Mumbai: Housing Development Finance Corporation Ltd. (HDFC) on Friday hiked its lending rates by 0.75% citing rising interest rates in the economy and shrinking liquidity in the system.

HDFC hiked its retail prime lending rate (RPLR) by 0.75% with effect from 1 December. RPLR is the rate to which its floating rate loans are linked.

Following the hike, for new home loan customers the floating rate loans will now be priced 9.5% per annum for loans up to Rs30 lakhs, 9.75% for loans up to Rs75 lakhs and 10% for loans above Rs75 lakhs, the bank said in a press release today.

While HDFC has increased its RPLR by 75 basis points since its last increase in September, the overall interest rates in the economy have moved up by 100 bps to 125 bps during this period, the bank said.

One basis point is one hundredth of a percentage point.

“This is in line with the rates of interest in the economy, which have hardened due to rising inflation and shrinking liquidity in the domestic market," the bank said.

To fight inflation, which is hovering way its target, the Reserve Bank of India has hiked rates six times so far this year.

It has increased the repo rate by 150 basis points to 6.25 and reverse repo by 200 basis points to 5.25 % to fight inflation.