HDFC Ltd raises retail prime lending rate by 5 basis points; EMI on home loans likely to go up

The monthly EMIs of housing loans are likely to rise as the mortgage lender HDFC Ltd has raised its retail prime lending rate (RPLR) on housing loans, the official statement of the company said. 

According to an official statement, “HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 5 basis points, with effect from June 1, 2022.”

Earlier, SBI and other lenders raised benchmark lending rates, pushing EMIs for the existing customers.  

Interest rates are expected to harden in the coming months as global inflationary fears have been stoked due to geopolitical tensions, mainly due to the Russian invasion of Ukraine. This prompted the Reserve Bank earlier this month to raise the inflation target.  

Even as it kept unchanged the key repo rate or the short-term lending rates to banks, the RBI said going further it will focus on withdrawal of accommodation to ensure that inflation remains within the target.  

The RBI has been mandated to keep the retail inflation at 4 per cent with a bias of 2 per cent on either side. 

This upward revision in loan rate will increase their loan EMIs on the re-set date for borrowers whose loans are linked with an existing MCLR-linked floating rate loan.