LIC Housing Finance Raises Rates By 50 bps

LIC Housing Finance has raised its prime lending rates by 50 basis points (bps). According to the corporation, interest rates on house loans will now begin at 8% as a result of this rise. Prior to this, the business reduced retail prime lending rates by 60 basis points to 7.50% in June.

According to the company's website, borrowers with a CIBIL score of 700 would pay an interest rate of 8.05% on house loans up to Rs50 lakh, 8.30% on those with a score of 600-699, and 8.75% on those with a score less than 600.

"The increase in the repo rate has created some little volatility in the equated monthly instalments (EMI) or the duration on house loans, but demand for homes would remain strong." As a result, the LIC HFL interest rate rise is in accordance with the market environment," said Y Viswanatha Gowd, managing director and chief executive officer, yesterday. The Reserve Bank of India (RBI) raised the repo rate by 50 basis points to 5.40% on August 5.

Gowd had stated that LIC Housing Finance will make a lending rate decision following the RBI policy rate meeting. Housing Development Finance Corporation (HDFC) upped its retail prime lending rate by 25 basis points twice this month, on August 9 and August 1. In its post-earnings analyst call, HDFC stated that it had changed from quarterly to monthly resetting of interest rates for house loan customers due to the impact of rising interest rates on the company's margin. Since the RBI raised the repo rate by 140 basis points in April, banks and other lenders have raised their lending rates. Following the latest increase in repo rates, almost all banks raised their external benchmark loan rates and marginal cost of funds-based lending rates.