As soon as the Reserve Bank of India (RBI) increased the repo rate by 25 basis points on Wednesday, i.e., 1 August 2018 (taking it to 6.50% from 6.25%), the mortgage lender HDFC Hiked Its Home Loan Interest Rates by 20 basis points.
As per the revised interest rates of HDFC on Thursday, women borrowers can secure a Home Loan of up to Rs. 30 Lakhs at 8.70% while other borrowers can avail Home Loan at an interest rate of 8.75%. For loan amounts of above Rs. 30 Lakhs, women can avail Home Loan at 8.80% while for others, the interest rate will be 8.85%. The new rates are effective from 1st August 2018.
On Wednesday, three banks viz. Kotak Mahindra Bank, Union Bank of India, and Karnataka Bank increased their MCLR (marginal cost of lending rates) by 5-10 basis points. However, the largest mortgage lenders such as SBI (State Bank of India), Punjab National Bank, and ICICI Bank have decided to keep their MCLR rates unaffected.
Kotak Mahindra Bank raised its 1-month and 3-month MCLR by 5 bps to 8.20% and 8.55%. Union Bank increased its 1-year MCLR by 10 bps to 8.55%.
In July this year, Indian Bank raised its MCLR by 10 bps, and Bank of Baroda by 5 bps, across tenures.
Banks have been increasing interest rates after RBI raised its repo rate in the month of June this year after a long gap of four years. Before June 2018, the central bank increased its rates in October 2013. Now, with two consecutive rate increases in a span of about just two months, even banks are expected to pass on the pressure to their customers by increasing the lending rates.
Looking at the pace at which interest rates are increasing, customers will have to prepare themselves for a further hike in rates in the future.
If you have been waiting to get a Home Loan at the lower interest rate, don’t wait too long and apply right now. The rates are expected to go down for a long now.