HDFC raises mortgage interest rates

MUMBAI: HDFC Bank raised its prime rate by 30 basis points, raising the cost of borrowing for all variable rate mortgage customers. The increase, effective May 9, follows the RBI’s key interest rate hike of May 4 by 40 basis points (100 basis points = 1%).
HDFC interest rate for female borrowers on loans up to Rs 30 lakh will now be revised to 7%, on loans between Rs 30 and Rs 75 lakh to 7.3% and loans above Rs 75 lakh at 7.4%. The interest rate is five basis points higher for loans where a woman is not part of the loan contract.
For banks, interest rates on their home loan portfolio automatically increase with an increase in the repo rate. Almost all banks have linked their floating home loan rate to the RBI repo rate. Older loans indexed to the marginal cost of lending are also increasing, but more gradually as they are reviewed monthly. Canara Bank is the latest to announce a 10 basis point increase in its MCLR rates across all maturities.
The Punjab National Bank has raised its fixed deposit rates (for deposits below Rs 2 crore) by 10 to 20 basis points across all maturities. In the case of deposits between Rs 2 crore and Rs 10 crore, the bank raised interest rates on 30-45 FD by 60 basis points to 3.5%.
The 30 basis point increase in HDFC will lead to a Rs 1,791 increase in the equivalent monthly installment on 20-year home loans of Rs 1 crore. The latest revision marks the end of the sub-7% home loan rates that prevailed in the two years following the Covid outbreak.

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