Housing Development Finance Corporation (HDFC) on Monday raised retail prime lending rates by 35 basis points (bps). The new lending rates will come into effect from December 20, the mortgage financier said in an exchange filing.
With this, HDFC will offer home loans at 8.65% for borrowers having credit score of 800 and above. This is the eighth time HDFC has increased the home lending rates since May. The company in September had hiked home loan rates by 50 bps.
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The latest increase in home loan rates comes after the Reserve Bank of India (RBI) increased the repo rate by 35 bps earlier this month. The company’s home loan interest rates for other category of borrowers are linked to the retail prime lending rate. It offers floating rate loans and trufixed loans, which has a fixed rate for certain tenure after which it is converted into an adjustable-rate loan.
HDFC saw a growth of 20% in the individual loan book, which consists of 80% of total assets under management (AUM). The company’s AUM increased by 16% to Rs 6.9 trillion as of September 30.
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Banks are also increasing their lending rates following the rate hike by the central bank. Earlier, State Bank of India (SBI) increased its marginal cost of funds based lending rates (MCLR) by 25 bps to 8.30%. Other banks too increased their MCLR in the range of 5-30 bps this month. So far, RBI has raised repo rate by 225 bps since May to 6.25%.
