HDFC hikes home loan interest rates

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New Delhi: India's top home loan lender HDFC increased lending rates by 0.50 per cent with effect from Tuesday, in the wake of Reserve Bank hiking key short term interest rates.

However, HDFC interest rates on deposits, will remain unchanged, said the bank. With this hike, the floating rate for home loans will be 9.5 per cent as against the previous 9 per cent, while the new fixed rate will be 11 per cent from 10.5 per cent earlier.

The primary lending rate of the banking major will be 12.25 per cent against earlier 11.75 per cent.

The Reserve Bank of India had hiked its short term lending and borrowing rates by 0.25 per cent, a week ago on July 25, aiming to keep a check on rising inflation.

Following this, many banks, including ICICI Bank and State Bank of India, had indicated they would hike their home and auto loan rates.

Dy MD, ICICI Bank Chanda kochhar says, "With the midterm hike that was announced in interest rates, we clearly saw funding rates going up. So the hike in lending rates therefore was purely a function of the rising funding costs."

ICICI Bank was the first to announce costlier loan rates on July 25, the day RBI announced reviewed credit policy.