After a gap of two years, mortgage leader HDFC today increased its retail prime lending rate (RPLR) by 50 basis points to 14.25 per cent.
Significantly, the lender has not said anything on the continuation of its "teaser rates loans", launched late last year and which was supposed to end today.
"This (the hike) is in line with the current rates of interest in the economy, which have hardened in the last few months due to rising inflation and tightening of liquidity in the domestic market," HDFC said in a statement, adding that the new rates will be effective from tomorrow.
This is the first hike since August 2008 by the largest mortgages player. HDFC follows a three-month reset cycle for its floating rate loans and hence the change in RPLR will impact all existing customers over the next three months, depending on their date of first disbursement, it said.
However, loans up to Rs 30 lakh will bear an effective interest of 9.25 per cent, while those in the Rs 30-50 lakh bracket, will carry an interest of 9.5 per cent. For loans above Rs 50 lakh, interest will be 9.75 per cent, the company spokesperson said, adding the above rates are irrespective of tenure of the loans.
A host of lenders like the State Bank, ICICI Bank and others have raised their benchmark lending rates in the last few weeks following the Reserve Bank hiking its key short-term lending and borrowing rates (repo and reverse repo) by 0.25 per cent and 0.50 per cent to 5.75 and 4.5 per cent respectively in the Q1 credit policy review on July 27.
Under the teaser rate scheme, which was innovated by SBI in early 2009, HDFC charges 8.25 per cent up to March 31, 2011, 9.25 per cent for the period between April 1, 2011 and March 31, 2012 and the applicable floating rate for the remaining term of the mortgage.