HDFC has taken this step after the Reserve Bank of India raised the repo rate by 0.40 per cent on Wednesday. Prior to this, several other lending institutions including ICICI Bank, Bank of Baroda and Bank of India have also increased the rates.
“HDFC has increased its retail prime lending rate (RPLR) on housing loans by 30 basis points with effect from May 9,” the housing finance company said in a statement.
The revised rates for new borrowers range from 7 per cent to 7.45 per cent depending on their creditworthiness and loan amount. Its current range is from 6.70 percent to 7.15 percent.
If we talk about the existing customers of HDFC, then the interest rates for them will increase by 0.30 percent.
HDFC had also raised its benchmark lending rate by 0.05 per cent in early May, making monthly installments (EMIs) of loans costlier for existing borrowers.
HDFC follows a three-month cycle to fix the new value of loans extended to existing customers. Hence the loan will be revised based on the enhanced lending rate based on the date of initial disbursement.