HDFC has officially increased interest rates on its home loans to the tune of 20 basis points. This comes after the Reserve Bank of India increased the benchmark repo rate by 25 basis points. The repo rate is now at 6.5%. At HDFC Bank, female borrowers can get home loans up to Rs. 30 lakhs at 8.7% and other customers will have to fork out 8.75%. The new rates of interest are effective from the 1st of August, 2018. For loans above Rs. 30 lakhs, female borrowers have to pay 8.80% while other customers have to pay 8.85% as the interest rate.
Kotak Mahindra Bank, Union Bank of India and Karnataka Bank have all raised their MCLR by 5-10 basis points. Other lenders like ICICI Bank, SBI and Punjab National Bank have not made any changes to their MCLR as of now. SBI had previously increased term deposit rates for select maturities between 5-10 basis points on the 31st of July 2018. Union Bank of India has increased the 1-year MCLR to 8.55% which is a rise of 10 basis points while Kotak Mahindra has increased its 1-month and 3-month rate to 8.20% and 8.55% which are both increases of 5 basis points. The 1-year MCLR stands the same at 8.95%.
The RBI has now increased repo rates for two consecutive months in succession after 4 years. Banks will be passing on the higher cost of funds to borrowers. Bank of Baroda has already increased MCLR by 5 basis points in July 2018 while Indian Bank has already raised its MCLR by 10 basis points across various loan tenors. Home loan customers will have to be prepared for the higher rates of interest expected in the future.