Home, car loans get dearer as lenders up rates
01 September 2010
With HDFC, the country's largest housing finance company raising its retail prime lending rate (RPLR) by half a percentage point, home loans in the country have become more expensive. Also HDFC's and ICICI Bank's special dual-rate scheme that offered low interest rates for the first two years has drawn to a close.
On a 50 basis point increase the equated monthly instalment on a Rs10 lakh loan will rise by Rs330. Also HDFC's dual-rate scheme allowing borrowers to raise loans at 8.25 per cent up to March 2011 and 9.25 per cent up to 2012 has also ended. However analysts say there is a likelihood of HDFC and ICICI Bank coming out with a revised dual-rate scheme, considering that State Bank of India's dual-rate offer will continue till the month end.
HDFC is the last of the large lenders to up its prime lending rate.
The SBI and ICICI last month increased their prime lending rate by 50 basis points and following Tuesday's increase, HDFC's lending rate on floating rate loans are almost in line with the two other lenders.
ICICI Bank's dual rate scheme closed yesterday, however, it has not yet announced its new rates nor the spread at which it will be extending home loans over the base rate.
With the 50 basis point hike, loans up to Rs30 lakh would now be on offer at 9.25 per cent, while loans between Rs30 lakh and Rs50 lakh would be available at 9.5 per cent. For loans of more than Rs 50 lakh borrowers will have to pay interest at 9.75 per cent.
As HDFC follows a three-month reset cycle for its floating rate loans, the RPLR change will impact all the existing customers over the next three-month period, depending on their date of first disbursement.