PNB, HDFC hike home loan rates by 50 basis points

Mumbai, Aug 01 (UNI) No sooner, the country's biggest mortgage company Housing Financing Development Corporation(HDFC) announced the hike in home loan rates this morning, the state owned Punjab National Bank followed suit by announcing a similar hike of 0.5 per cent in home loan rates and 0.25 per cent increase in other lending rates with effect from today.

Interest rate on housing loan is hiked by 50 basis points (0.5 per cent) while Benchmark Prime Lending Rate (BPLR) has been raised by 25 basis points, said a top PNB official here.

The new lending rates are effective from Tuesday. In effect, this means that the floating home loan interest rates have gone up to 8.75 per cent for a maturity period of upto 5 years, to 9 per cent for 5-10 years, to 9.25 per cent for 10-20 years and to 9.75 per cent for 20-25 years.

Similarly, the fixed home loan rates have gone up to 10 per cent from 9.75 per cent for loans upto 5 years. The bank increased its BPLR by 25 basis points or 0.25 per cent to 11.50 per cent from 11.25 per cent.

That means, the bank has hiked interest rates for all other loans including for auto and personal loans, by 0.25 per cent.

After the Reserve Bank increased short-term rates by 0.5 per cent in the last two months, most of the banks and housing finance companies had said they would raise lending rates as high cost of funds might affect profitability.

However, the country's second biggest private sector bank ICICI Bank has decided against hiking the home loan rates ''for the time being,'' said its Executive Director Ms Chanda Kochhar. She said,''We would like to wait and watch for a while, before making any announcement on the hike in rates.'' UNI SN PM AW1916