HDFC raises home loan rate by 10 bps

Interest rate on loans of up to Rs 30 lakh will be 10.5%, while for Rs 30-75 lakh it will be 10.75%

The country’s largest home financier, Housing Development and Finance Corporation (HDFC), has hiked its home loan rates by 10 basis points (bps) with effect from December 1.

The interest rate on home loans of up to Rs 30 lakh will now be 10.5 per cent, while from Rs 30 lakh to less than Rs 75 lakh, the rate will be 10.75 per cent.

Following the hike, the lender’s retail prime lending rate now stands at 16.75 per cent.

This is the first rate increase by the home loan firm since it had hiked it by a similar amount on August 24.

The Reserve Bank of India (RBI) had hiked the key policy rate or the repo rate, by 25 bps each in September and October. Following the October rate hike by RBI, State Bank of India and HDFC Bank had raised their base rates — the benchmark lending rate to which all loan rates are linked. Both SBI’s and HDFC Bank’s base rates are now 10 per cent.

Since HDFC depends on borrowed funds that are largely from banks, any rate revision by the banks have a direct impact on its cost of funds.