Home Loan Rates Increase: LIC Housing Finance and Bajaj Housing Finance have recently announced a hike in lending rates for home loans by 0.5 per cent. Banks and non-bank lenders have been reviewing their lending rates ever since the Reserve Bank of India (RBI) increase its key interest rate by 140 basis points in three tranches since May 2022.
Bajaj Housing Finance
On Monday, Bajaj Housing Finance hiked its rate by 0.50 per cent points, and the lowest priced product for the salaried and professional applicants will be 7.70 per cent now, as per an official statement. Despite the latest hike, the company claimed to be offering loans at competitive rates compared to most of its peers.
According to an official statement, Bajaj Housing Finance lending rates will now start at 7.70 per cent for salaried and professional applicants. Self-employed applicants can avail home loans starting at 7.95 per cent based on floating interest rates.
LIC Housing Finance
Whereas, LIC Housing Finance has increased its prime lending rate (LHPLR) by 0.50 percentage points and the new interest rates on home loans will now start from 8 per cent as against 7.50 per cent previously.
The company’s chief executive and managing director Y Viswanatha Gowd said the RBI’s decision to hike the repo rate by 0.50 per cent has caused “minimum fluctuation” in monthly installments or tenure of home loans and exuded confidence that demand for housing will remain robust.
In a borrower has a CIBIL score of 700 or above, the interest rate on home loans more than or equal to Rs 10 lakh will be 8.05 per cent for salaried and professionals. In the case of salaried and professionals having CIBIL greater or equal to 700, the borrower will need to pay an interest rate of 8.25 per cent on home loans up to Rs 50 lakh, 7.75 per cent on more than Rs 50 lakh to Rs 2 crore, and 7.90 per cent on housing loans above Rs 2 crore to Rs 15 crore.
On CIBIL scores between 600 and 699, the interest rate will be 8.30 per cent on home loans up to Rs 50 lakh, 8 per cent on more than Rs 50 lakh up to Rs 2 crore, and 8.50 per cent on above Rs 2 crore and up to Rs 15 crore. Those having a CIBIL score of less than 600 will be offered an interest rate of 8.75 per cent on home loans up to Rs 50 lakh, 8.50 per cent on over Rs 50 lakh to Rs 2 crore, and 8.75 per cent on more than Rs 2 crore to Rs 15 crore.
Meanwhile, for individuals with a CIBIL score of 101-200 or NTC, the rate is 8.70 per cent for up to Rs 50 lakh loan and 8.90 per cent for more than Rs 50 lakh to Rs 1 crore.
LIC Housing, for individuals with a CIBIL score of equal to or greater than 700, is offering an 8 per cent interest rate on home loans greater or equal to Rs 10 lakh.
As the Reserve Bank of India is in the rate tightening monetary policy mode and increasing its key repo rates to control inflation, commercial lenders are also following suit and raising their interest rates. RBI, in the last three policy meets, has increased the repo rate by 140 basis points – 40 basis points in May, 50 basis points in June, and 50 basis points in August. The latest announcement regarding the policy rate hike was made on August 5.
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