With the Reserve Bank of India's Monetary Policy Committee (MPC) recently announcing a 25 basis points hike in the key repo rate to 6.50 per cent, banks are likely to pass on the burden to customers in the form of more expensive loans. Actually, Kotak Mahindra Bank and India's biggest mortgage lender HDFC have already set the ball rolling.
HDFC yesterday hiked interest rates on home loans by 20 basis points with effect from August 1. Salaried women borrowers can now avail a home loan of up to Rs 30 lakh at 8.7-9.20 per cent per annum while other customers will be charged a rate of 8.75-9.25 per cent. For loans above Rs 30 lakh, salaried women will be charged at 8.80-9.30 per cent while other borrowers will be charged 8.85-9.35 per cent.
The home loans for self-employed female borrowers start at 8.50 per cent, while that for male borrowers start at 8.55 per cent for small ticket loans. The interest on loans (two-year fixed rate variant) of above Rs 75 lakh range from 9.20 to 9.70 for salaried borrowers, and 9-9.50 per cent for the self-employed.
On Wednesday, Kotak Mahindra Bank also raised its one-month and three-month MCLR, or marginal cost of lending rate, by 5 basis points to 8.20 per cent and 8.55 per cent, respectively. The effective interest rate for salaried individuals is 8.65 per cent, while that for the self-employed is 8.75 per cent.
Currently, SBI offers among the cheapest home loans, starting at 8.45 per cent for loans up to Rs 30 lakh taken by female salaried borrowers while those who are not salaried will be charged 8.60-8.70 per cent. The interest rate for other salaried borrowers starts at 8.50 per cent for loans up to Rs 30 lakh while the self-employed are charged 8.65-8.75 per cent. Those looking at home loans of over Rs 75 lakh will be charged anywhere from 8.70-9 per cent (see table).
However, if you are planning to take a home loan, you'd best hurry before SBI and other banks too hike up lending rates. The pundits predict that this is more than likely.