LIC Housing Finance increases home loan rate to 6.9% for select borrowers

Mortgage financier LIC Housing Finance (LIC HFL) on Friday increased interest rate on home loans by 20 basis points to 6.9 per cent, from 6.7 per cent, for select borrowers.

For borrowers with CIBIL score of 700 and above, the rate hike has been limited to only 20 bps, LIC Housing Finance said in a statement, adding that the revised rates are applicable from Friday.

For customers having CIBIL score (less than 700) maximum hike is 25 basis points (bps). For NTC (New to Credit) customers the hike is 40 bps.

CIBIL Score is a 3-digit numeric summary of a customer's credit history. It ranges between 300 to 900. The closer the score is to 900, the better the credit rating is.

The increase in the lending rate follows a hike of 40 basis points in the repo rate to 4.40 per cent by the Reserve Bank of India last week.

"RBI has after a long time increased the policy rates and the effect is being seen across the lenders. We have kept our home loan rates competitive despite the increase in the cost of funds to support the aspirations of home buyers," LIC HFL's Managing Director and CEO Y Viswanatha Gowd said.

Many banks, including HDFC Bank, Canara Bank, Bank of Maharashtra and Karur Vysya Bank revised their lending rates based on marginal cost of funds and repo rate.