Lenders including ICICI Bank, Bank of Baroda and Bank of India raised interest rates following the Reserve bank’s surprise repo rate on Wednesday.
On Saturday, May 7, mortgage financing company Housing Development and Finance Corporation (HDFC) hiked its retail prime lending rate. The new rates will be effective from Monday, May 9. This move comes in the wake of increased inflation in India as a result of interest rates being increased by Reserve Bank of India on Friday – an event that came close to HDFC’s decision to increase their interest rates on the same day by 30 basis points or 0.30%.
The same interest rates have been hiked by 5 basis points days before the repo rate hike amid inflation concerns. After this change, borrowers with a credit score of over 750 will receive loans at 7 per cent for adjustable-rate home loans, whereas earlier they were getting one that was 6.70 percent in some categories but as high as 7.45 per cent in other ones like women’s loan products to which this rule applies.
The floating or variable interest rates of ARHL ensures each customer with a loan has an appropriate amount of payment. HDFC is willing to change the rates according to when they disburse those loans, which will be reconciled on the basis of three different months, and so it’s possible that borrowers could pay more at some point in time than others.
Here are the revised adjustable rate home loans for credit score of 750 plus (effective from May 9 onwards)
#1. For loans of up to Rs 30 lakhs, female customers will be charged an interest rate of 7 per cent. For other customers, the interest rates have been hiked by 30 basis points to 7.05 per cent from 6.75 percent previously
#2. Women borrowers will now have to pay an interest rate of 7.30 per cent from loans above Rs 30 lakh and below Rs 75 lakh, a significant increase over the earlier rate of 7 per cent. The rates for other customers has increased by 30 basis points to 7.35 per cent up from the previous level at 6 percent.
#3. In an increase of 30 basis points, loans above Rs 75 lakh will now have a 7.40 per cent interest rate for women as opposed to the earlier 7.10 per cent for men and a new hike of 30 basis points to 6.95 percent in case other borrowers apply (up from the earlier 6.75 percent).
On May 4, the Reserve Bank of India raised its benchmark interest rates. This has caused lenders to raise their external lending rates as well. These increases are anticipated and more banks will be joining in to do so.
Featured Image Source – Wikipedia HDFC
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