Icici, Hdfc Hike Housing Loan Rates

ICICI Ltd and Housing Develop- ment Finance Corporation have hiked their housing loan rates by 50 basis points. Smaller housing finance companies, which have been waiting for HDFC and ICICI's signal, are likely to follow suit over the next few days. ICICI has hiked its fixed rate loans from 12.75 per cent to 13.25 per cent with effect from August 24. In contrast, HDFC has left its fixed rate loan untouched but hiked the interest rates on loans in the category of adjustable rate home loans by 50 basis points to 13 per cent from 12.5 per cent. The rate remained unchanged for the fixed rate home loans which is currently pegged at 13 per cent. Confirming the rate hike, Chanda Kochhar, senior general manager, personal finance services, ICICI, said: "It is a global phenomenon and interest lContinued on Page 8 rates are rising every where. Every one who is directly impacted by the rate hikes will hike their rates." ICICI hiked interest rates across all categories of housing loans by 50 basis points except for the Rs 1 lakh to 5 lakh slab where the hike was to the tune of 75 basis points "" from 11.25 per cent to 12 per cent. ICICI offers loans for the duration of 5 to 10 years and 10 to 15 years. Both these categories will now carry interest at the rate of 13.25 per cent, higher from 12.75 per cent. The maximum term for HDFC's ARHL is 20 years with no prepayment charges. Suresh Menon, regional manager, Mumbai, HDFC, said: "Our variable borrowings are affected by bank rate hike which triggered the hike in lending rates by banks. This has prompted us into increasing the variable housing loan rates." HDFC has not changed the rates on the fixed rate loans. Banks have recently hiked their prime lending rates ranging between 50 basis points and 75 basis points. Among the financial intermediaries, financial institutions are yet to announce any hike in lending rates. The Reserve Bank of Indai on July 21 hiked the bank rate by one percentage point and banks' cash reserve ratio (CRR) by half a percentage point to curb the currency volatility. The RBI also cut banks' refinance facility by 50 per cent as part of its tight money measurs.