home loans to get costlier; housing financiers raise lending rates this much

 LIC Housing Finance and Bajaj Housing Finance on Monday announced a hike in lending rates for home loans by 0.5 percentage points.

Home loans to get costlier with hike in lending rates.

LIC Housing Finance and Bajaj Housing Finance on Monday announced a hike in lending rates for home loans by 0.5 percentage points. With this hike, the lowest priced product at Bajaj Housing Finance, for the salaried and professional applicants, will be at 7.70 per cent now. Despite the latest hike, the company has claimed to be offering loans at competitive rates.

For LIC Housing Finance, the new interest rates on home loans will start from 8 per cent as against 7.5 per cent before the hike. The company’s chief executive officer and managing director Y Viswanatha Gowd maintained that the RBI’s repo rate hike by 0.5 percentage points has caused ‘minimum fluctuations’ in monthly installments or tenure of home loans. He also said that the demand for housing will remain robust.

The RBI had raised the repo rate – the key monetary policy rate – by 50 basis points to 5.4 per cent, earlier this month, to counter the inflationary pressure. The latest hike has led the repo rate to cross the pre-pandemic level of 5.15 per cent. RBI’s rate hike is the third consecutive after a 40 basis points increase in May, and 50 basis points increase in June. RBI Governor Shaktikanta Das had signaled that the latest hike wasn’t the end of the rate tightening regime and indicated that there may be more hikes in order to tame inflation.

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