Synopsis: HDFC Bank has revised its Marginal Cost of Funds-Based Lending Rate (MCLR) by up to 5 basis points across various tenures, resulting in new interest rates ranging from 9.10% to 9.45%. This adjustment could affect borrowers, particularly those with home loans, as they may experience higher EMIs.
HDFC Bank has announced an upward revision in its Marginal Cost of Funds-Based Lending Rate (MCLR), according to an update on its official website on August 8, 2024.
The MCLR, which represents the minimum interest rate that a financial institution must charge for a specific loan, is a critical factor in determining loan interest rates for borrowers.
In this latest adjustment, HDFC Bank has increased the MCLR by up to 5 basis points (bps) across various loan tenures.
This means that the MCLR for HDFC Bank now ranges between 9.10% and 9.45%, depending on the loan tenure.
The revised rates are as follows:
- Overnight Tenure: Increased from 9.05% to 9.10% (up by 5 bps).
- One Month Tenure: Increased from 9.10% to 9.15% (up by 5 bps).
- Three Month Tenure: Increased from 9.20% to 9.25% (up by 5 bps).
- Six Month Tenure: Increased from 9.35% to 9.40% (up by 5 bps).
- One Year Tenure: Increased from 9.40% to 9.45% (up by 5 bps).
- Two-Year and Three-Year Tenure: Increased to 9.45%.
Impact on Home Loan Borrowers:
For home loan borrowers, this increase in MCLR could mean higher Equated Monthly Installments (EMIs) in the near term.
As a significant portion of home loans is linked to the one-year MCLR, which has now risen to 9.45%, borrowers may have to budget for slightly higher monthly payments.
HDFC Bank offers both adjustable-rate (floating) and fixed-rate home loans.
The adjustable-rate loans are directly linked to the MCLR, while the fixed-rate loans have a set interest rate for a specified initial tenure, after which they switch to the floating rate.
All these rates are benchmarked against the current Policy Repo Rate, which stands at 6.50%.
Latest HDFC Bank Home Loan Rates:
For salaried and self-employed individuals, the home loan rates vary as follows:
- Special Home Loan Rates: Policy Repo Rate + 2.25% to 3.15%, resulting in rates between 8.75% and 9.65%.
- Standard Home Loan Rates: Policy Repo Rate + 2.90% to 3.45%, resulting in rates between 9.40% and 9.95%.
Additionally, HDFC Bank's benchmark Prime Lending Rate (PLR) is currently 17.90% per annum, effective from June 18, 2024, while the revised Base Rate is set at 9.40% per annum.
In conclusion, HDFC Bank’s recent increase in MCLR reflects broader market conditions and the current Policy Repo Rate.
While the adjustment might result in higher EMIs for borrowers, it’s essential to note that these changes are part of the broader economic environment.
Borrowers should consider their financial situation and future rate expectations when planning their loans.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment or borrowing decisions.
