MUMBAI: HDFC, the country’s largest mortgage lender, has increased its home loan rates by 20 basis points (100bps = 1 percentage point) a day after the RBI hiked its key policy rate by 25bps.
The corporation said that it has increased its benchmark retail prime lending rate (PLR) by 20bps with effect from August 1, 2018. All floating rate loans are linked to the retail PLR.
Following the increase, loans up to Rs 30 lakh for women borrowers will be available at 8.7%, while the rate for loans above Rs 30 lakh will be 8.8%. For other customers, the rate will be 5bps more.
ICICI Bank currently offers home loans up to Rs 30 lakh for salaried women borrowers at 8.55%. For loans between Rs 30 lakh and Rs 75 lakh, the rate is 8.65%, and 8.7% for loans above Rs 75 lakh. For male borrowers, the interest rate is 5bps higher. SBI’s cheapest loans begin at 8.45% and they increase, depending on employment status, size of loan, loan-to-value ratio and gender of borrower.
Commenting on the RBI action, HDFC CEO Keki Mistry hinted at a possible hike in rates, stating that lending rates are a function of cost of funds. “If cost of funds increases as a result of the increase in the lending rates, then I am sure all the mortgage companies and the banks will necessarily pass on the rate hike to consumers.”