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Business News/ Companies / News/  HDFC hikes lending rate by 25 bps from tomorrow, home loan to be costlier
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HDFC hikes lending rate by 25 bps from tomorrow, home loan to be costlier

HDFC today announced an increase in its benchmark lending rate by 25 basis points, a move that will make loans dearer for both existing and new borrowers

HDFC has again raised its RPLR, on which its adjustable-rate home loans are benchmarked, by 25 basis points.Premium
HDFC has again raised its RPLR, on which its adjustable-rate home loans are benchmarked, by 25 basis points.

Mortgage financier Housing Development and Finance Corporation (HDFC) on Monday increased its retail prime lending rate (RPLR), on which its adjustable-rate home loans are benchmarked, by 25 basis points, with effect from 9 August, 2022, HDFC said in a BSE filing.

In a statement, the mortgage lender said, "HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 25 basis points, with effect from August 9, 2022."

This is the second hike in this month as an earlier hike of 25 basis points was effected from 1 August.

This is the sixth increase undertaken by HDFC in three months. In all the rate has been increased by 140 basis points since May 2022.

Previously, on 9 June, the country's largest housing finance company increased the RPLR by 50 basis points. On 1 June, it had raised the same by 5 basis points. On 2 May, it had hiked the rate by 5 basis points and on 9 May, the home loan rates were increased by 30 basis points.

For existing customers, the rates would rise by 25 basis points or (0.25%). HDFC follows a three-month cycle for repricing its loans to existing customers. So the loans will be revised in sync with increased lending rate based on the date of the first disbursement of each customer.

The latest hike comes after the Reserve Bank of India's (RBI) monetary policy committee (MPC) raised its repo rate by 50 basis points on Friday, the third increase in the current cycle, to cool stubbornly high inflation that has remained above its tolerance band for six straight months.

Financial institutions are on an interest rate hike spree in line with RBI's monetary tightening since May.

The RBI has hiked the repo rate by aggregate of 140 basis points since it started its rate hike cycle through an unscheduled meeting in May. It is scheduled to meet in September as well as in December.

Analysts say the central bank is likely to raise its key policy rate by upto 60 basis points by the end of 2022, before pausing, but the pace of rate hikes is likely to slow down.

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ABOUT THE AUTHOR
Meghna Sen
Business journalist tracking markets, companies, economy and crypto for Livemint. She has 6 years of experience with online and print publications. Email: meghnasen08@gmail.com
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Published: 08 Aug 2022, 10:23 PM IST
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