Monthly home loan EMIs are expected to rise as mortgage lender HDFC Ltd raised its benchmark lending rate by 5 basis points on Sunday. HDFC’s rate hike is in line with other lenders including State Bank of India and Bank of Baroda.
According to an official statement, “HDFC is increasing its Retail Prime Lending Rate (RPLR) on home loans, against which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 5 basis points, effective May 1, 2022.”
There is no change in loans for new borrowers. Rates for new borrowers range between 6.70% and 7.15%, depending on credit and loan amount, the statement said.
Last month, SBI and other lenders raised benchmark lending rates, pushing EMIs for existing customers.
Interest rates are expected to tighten in the coming months as global inflation fears have been fueled by geopolitical tensions, mainly due to the Russian invasion of Ukraine. That prompted the Reserve Bank earlier this month to raise the inflation target.
Even if it kept the key repo rate or short-term lending rates to banks unchanged, the RBI said it would focus on withdrawing accommodation to ensure inflation remains within target .
The RBI has been mandated to keep retail inflation at 4% with a 2% bias to either side.
With PTI entries