HDFC hikes retail prime lending rate and home loan interest rates from today: “HDFC has increased its Retail Lending Rate (RPLR) on home loans benchmarking its Adjustable Rate Home Loans (ARHL) by 25 basis points,” the mortgage lender said in a statement.
What does a Retail prime lending rate (RPLR) hike mean?
The retail prime lending rate is the rate at which housing finance companies lend to their customers based on their creditworthiness. When lenders extend their loans to customers, the RPLR is considered benchmarked against those rates. Thus, an increase in RPLR will result in higher EMIs to be paid by home loan borrowers.
HDFC hikes retail prime lending rate and home loan interest rates from today
Borrowers will have to pay more EMIs out of their pocket if they pay higher EMIs. On the other hand, it can reduce aggregate demand because borrowers can spend less on other goods and services. This will reduce inflation and prices in the overall economy, which can benefit borrowers when prices for other goods and services fall.”
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The announcement comes almost a week after HDFC raised the RPLR by 25 bps. This has been increased by 140 bps cumulatively. On June 09, the lender increased the RPLR by 50 basis points. Earlier on June 1, it had increased by 5 basis points. HDFC had hiked rates twice in the month of May. On May 2, it increased the rates by 5 basis points and on May 9, it increased the rates of home loans by 30 basis points.
Last yesterday, HDFC Bank also announced an increase of 5-10 bps in the marginal cost of funds-based lending rate (MCLR) across all loan tenures with effect from August 8, 2022.
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Banks and NBFCs are expected to increase their lending rates aggressively, as the Reserve Bank of India (RBI) is increasing the repo rate from May to tame inflation.
Last week, the RBI MPC raised the repo rate by 50 basis points to 5.4 percent, its third consecutive increase since May, on inflation concerns, which have come under pressure since the war broke out in Europe in February.
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