HDFC Ltd mentions in its website that a home loan customer can choose between two types of interest rate options while availing a home loan.
Home Development Finance Corporation Ltd (HDFC) has announced that it has hiked Retail Prime Lending Rate (RPLR) by 35 basis points, a move that will push the home loan EMI rates higher. The new rates are effective from today December 20, 2022.
In a BSE filing, the lender said, “HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 35 basis points, with effect from December 20, 2022.”
HDFC Ltd mentions in its website that a home loan customer can choose between two types of interest rate options while availing a home loan.
Adjustable Rate Home Loan (ARHL): An Adjustable Rate Home Loan is also known as a floating or a variable rate loan. The interest rate in an ARHL is linked to HDFC’s benchmark rate i.e. Retail Prime Lending Rate (RPLR). Any movement in HDFC’s RPLR may effectuate a change in the applicable interest rates.
TruFixed Loan: In a TruFixed loan, the home loan interest rate remains fixed for a specified time period (for eg., for the first 2 or 3 years of the loan tenure) after which it automatically converts to an Adjustable Rate Home Loan with the then applicable interest rates. HDFC currently offers a TruFixed loan where the interest rate is fixed for the first two years of the loan tenure.
Several banks and lenders have revised their lending rates after the Reserve Bank of India hiked its benchmark lending rates on December 7. The RBI Monetary Policy Committee led by Governor Shaktikanta Das hiked Repo Rate by 35 basis points to 6.25 percent on December 7. Repo is the rate at which Reserve Bank of India lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. This is the third hike since the beginning of the current financial year, taking the rate is back to pre-pandemic levels in order to tame the inflationary pressure.