Mortgage lender HDFC Ltd announced an increase in its benchmark lending rate by 25 basis points (bps), a move that will make loans dearer for both existing and new borrowers. The move came after RBI on Friday raised the benchmark lending rate by 50 basis points to 5.40 per cent in its effort to cool down rising inflation. Following the rate hike, borrowing from the central bank has become costlier.
”HDFC increases its Retail Prime Lending Rate (RPLR) on housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 25 basis points, with effect from August 9, 2022,” the biggest housing finance company said in a statement.
This is the second hike in this month as an earlier hike of 25 basis points was effected from August 1. This is the sixth increase undertaken by HDFC in three months. In all the rate has been increased by 140 basis points since May this year. For existing customers, the rates would rise by 25 basis points or (0.25 per cent). HDFC follows a three-month cycle for repricing its loans to existing customers. So the loans will be revised in sync with increased lending rate based on the date of the first disbursement of each customer.
Financial institutions are on an interest rate hike spree in line with RBI’s monetary tightening since May.