Life Insurance Corporation Housing Finance Ltd (LIC HFL) has raised the rate of its loan products following the revision of the Reserve Bank of India (RBI) repo rate. The new interest rates on home loans start at 6.9%, down from 6.7% previously. The latest rates have been in effect since May 13.
“LIC Housing Finance Ltd (LIC HFL), one of India’s largest housing finance companies, has revised the interest rate for its loan products following the announcement by the Reserve Bank of India (RBI ) the 4e May 2022, revision of the repo rate. As a result, LICHFL has revised up its interest rates across all categories of retail lending products,” he said.
LIC HFL MD and CEO Y Viswanatha Gowd said, “RBI has after a long time raised policy rates and the effect is being felt across all lenders. We kept our home loan rates competitive despite the rising cost of funds to support homebuyer aspirations. For borrowers with a CIBIL score of 700 and above, the rate hike was limited to just 20 basis points. In my opinion, this increase may not have a significant impact on EMI’s expenses. I am convinced that the demand for home loans remains high.
The RBI had, at an off-cycle meeting of the MPC, decided to raise interest rates by 40 basis points to 4.40% due to rising inflation. An increase in repo rates means an increase in lending and EMI rates. This was the first rate hike since August 2018 and the first instance of the MPC making an unanticipated increase in the repo rate.
Announcing the MPC meeting, Governor Das said that “as economic activity navigates the vortex of forces that confront the world with resilience thanks to the strength of underlying fundamentals and buffers, Risks to the near-term inflation outlook are rapidly materializing, as evidenced by the March inflation print and developments thereafter.
Also read: MPC expects inflation to reign at high levels: RBI Gov Shaktikanta Das
Also Read: RBI Guv Das Announces 40bps Interest Rate Hike to 4.40% at ‘Off-Cycle’ MPC Meeting