HDFC BANK HIKES INTEREST RATES. HERE’S HOW IT COULD IMPACT LOAN AND EMI

 

New Delhi: Mortage lender Housing Development and Finance Corporation (HDFC) has increased its retail prime lending rate (RPLR) by 5 basis points (bps), resulting in an identical hike in home loan rates for existing customers. For customers with a credit score of above 750, HDFC's adjustable-rate home loans will now be 6.75 per cent. The new rates will come into effect from May 1, 2022.

 

Revised Retail Prime Lending Rate

Loan Slab	Home Loan Interest Rates (% p.a.)
For loans up to 30 Lakhs	6.85%
For loans up to 30.01 Lakhs to 75 Lakhs	7.10%
For loans up to 75.01 lakhs & above	7.20%

 

This comes after many banks including SBI, Kotak Mahindra and Bank of Baroda (BOB) increased the marginal cost of lending rate (MCLR). Earlier last month, the SBI had hiked the marginal cost of lending rate (MCLR) on loans across all tenors by 10 basis points. One basis point is equivalent to one-hundredth part of a percentage point.

How do Lending Rates Impact Loan Customers?

The banks will have to fix interest rates for different types of customers on the basis of the MCLR. Taking into consideration the repo rate and other lending rates, banks revise the MCLR on a monthly basis. Five benchmark rates are required for different tenures which range from 1 day to 1 year. The banks are free to set rates for tenures exceeding 1 year. Banks cannot lend below the MCLR but there are a few exceptions. For loans against deposits and loans to employees of the respective bank, banks can lend below the MCLR.