Home loans will cost more as mortgage company HDFC raises lending rates by 25 basis points

10 Aug 2022 , 08:41 AM

Home loans are now more expensive for both new and existing customers according to a 25-basis point increase in the benchmark lending rate announced by mortgage lender HDFC Ltd. The price increase is effective as of August 9.

The housing loan major had upped the lending rate by 25 basis points on August 1, making the recent rise the second for this month.

The largest house financing firm announced in a statement that it would increase its Retail Prime Lending Rate (RPLR) on housing loans, on which its Adjustable-Rate Home Loans (ARHL) are benchmarked, by 25 basis points beginning on August 9, 2022.

The action was taken after the RBI raised important interest rates by 50 basis points, bringing the repo rate to 5.40%, in its most recent monetary policy announcement in an effort to contain increasing prices.

In the last three months, HDFC has implemented a total of six increases. Since May of this year, the rate has grown by a total of 140 basis points.

The tariffs would increase by 25 basis points for current clients or (0.25%). For its loans to current customers, HDFC uses a three-month period. Accordingly, the loans will be updated in accordance with an enhanced lending rate depending on the date of each customer’s initial payout.

In accordance with the RBI’s monetary tightening since May, financial institutions are on a rampage of interest rate increases.