Big setback for borrowers, HDFC home loan rate hiked by 10 bps; your dream home access gets costlier

Following in the footsteps of other lenders, mortgage lender HDFC today increased its retail prime lending rate (RPLR) by 10 basis points with immediate effect. The new rates vary from 8.80 to 9.05 per cent on various slabs of loans, thereby, making the home loans that much costlier. In a statement to the BSE, the lender said, “HDFC has increased its retail prime lending rate (RPLR), on which its adjustable rate home loans are benchmarked, by 10 basis points, with effect from October 1, 2018.” 
 
This HDFC move comes in wake of an overall increase in interest rates in the financial system. Earlier on Saturday, Punjab National Bank (PNB) had increased its benchmark lending rates or MCLR for short-term loans by up to 0.2 per cent. The PNB lending rates are also effective from today.
 
The PNB's overnight marginal cost of funds based lending rate (MCLR) now stands at 8.2 per cent as against 7.9 per cent. The MCLR for a one-month tenor were earlier raised to 8.10 per cent from 8.05 per cent.
 
HDFC raised the rates ahead of the Reserve Bank's monetary policy announcement. The Central bank's monetary policy committee (MPC) is expected to raise policy rates by 25 basis points on Friday for the third time this year. The rates revision is likely to come in the wake of surging crude oil prices and weakening of domestic currency. 
 
RBI in the fourth monetary policy review on October 5 is expected to raise repo rate by 25 bps, which will reportedly be driven on concerns over inflation and a weak rupee.   
 
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Meanwhile, shares of HDFC ended 3% higher on the BSE at Rs 1,811, as compared to a 0.83% gain in Sensex.