HDFC raises retail prime rate on home loans; Loans and EMIs will become more expensive

HDFC has increased its retail prime rate (RPLR) on home loans effective Monday, August 1, which will make loans more expensive for new and existing borrowers, including matching monthly payments. Its adjustable rate mortgages (ARHL) are referenced on the RPLR of 25 basis points.

“HDFC is increasing its Retail Prime Lending Rate (RPLR) on home loans, against which its adjustable rate home loans (ARHL) are benchmarked, by 25 basis points, effective August 1, 2022,” the company said. housing finance in a press release. .

The move comes ahead of the RBI’s Monetary Policy Committee (MPC) meeting later next week. The MPC, in its previous policy review in June, raised the key repo rate by 50 basis points (bps), which was the second hike in nearly a month after rising 40 basis points. baseline during an off-cycle policy review in May. Retail inflation in June stood at 7.01%, slightly lower than the 7.04% recorded in May, but above the RBI’s target limit of 2-6%. In the next policy review, the MPC is also expected to increase the repo rate.

This is the HDFC’s fifth hike since May. Over the two months, a total of 115 basis points were raised. Revised rates for new borrowers range between 7.80% and 8.30%, depending on credit and loan amount. The current range is 7.55% to 8.05%. For existing customers, rates will increase by 25 basis points or (0.25%).

HDFC follows a 3-month cycle to reassess its loans to existing customers. Thus, the loans will be revised in synchronization with the increase in the loan rate according to the date of the first disbursement of each client.

According to the lender’s website, its Home Loan/EMI Interest Rates are applicable to loans under the Housing Development Finance Corporation Limited (HDFC) Variable Rate Home Loan Scheme and “are subject to change at the time of disbursement”. Home loan interest rates are tied to HDFC’s benchmark rate – RPLR – and vary throughout the life of the loan. All loans are at the sole discretion of HDFC Ltd.

Lenders including Bank of Baroda, Kotak Mahindra Bank and PNB have raised deposit and lending rates over the past two months after the MPC raised key repo rates to control the inflation in the country.

Apart from loans, FD rates are also increasing in the country. This week, private sector lender DBS Bank India was the latest to raise its fixed deposit (FD) interest rates for funds below Rs 2 crore. The new tariffs came into effect from Thursday (July 28). The lender raised interest rates through the warrants. It now offers interest rates in the range of 2.5 to 6.25% for the general public and 3 to 6.75% for the elderly.

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