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Mumbai: With Housing Development Finance Corporation (HDFC) and ICICI Bank hiking lending rates more than half of the outstanding home loans have become more expensive. HDFC raised interest rates by 75 basis points for new borrowers and by 50 basis points for existing customers. HDFC will now charge 11.25 per cent for floating rate loans and 13.25 per cent for fixed rate loans. These levels on fixed rate loans were last seen in 1999. ICICI Bank, the largest private sector bank, had raised its consumer loan rates, including home loans by 100 basis points, for both existing as well as new borrowers last Saturday. The interest rate on ICICI's floating rate home loans now is 12 per cent and on fixed rate 14 per cent. UTI Bank has also has announced a 100 basis points increase in its prime lending rate, while public sector banks are wait till the Reserve Bank of India (RBI) announces its 2007-08 monetary policy on April 24. The current round of interest rate hikes follow RBI's decision on Friday to raise the level of cash balances banks need to maintain with it by 50 basis points to 6.50 per cent in two stages effective April 14 and April 28, and the rate at which it lends funds to banks for a day against government securities by 25 basis points to 7.75 per cent.
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