Mortgage lender HDFC Ltd on Sunday raised its benchmark lending rate by 5 basis points, a move that will increase EMI for existing borrowers. The rate increase is in line with other lenders, including the State Bank of India and Bank of Baroda.
“HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 5 basis points, with effect from May 1, 2022,” the company said in a statement. There is no change in the lending for new borrowers. The rates for new borrowers range between 6.70 per cent and 7.15 per cent, depending on credit and loan amount. Last month, SBI and other lenders raised benchmark lending rates, pushing EMIs for the existing customers.
Interest rates are expected to harden in the coming months as global inflationary fears have been stoked due to geopolitical tensions, mainly due to the Russian invasion of Ukraine. This prompted the Reserve Bank earlier this month to raise the inflation target. Even as it kept unchanged the key repo rate or the short term lending rates to banks, the RBI said going further it will focus on withdrawal of accommodation to ensure that inflation remains within the target.
The RBI has been mandated to keep the retail inflation at 4 per cent with a bias of 2 per cent on either side.