New Delhi: The Life Insurance Corporation (LIC) Housing Finance on Monday raised its prime lending rate by 50 basis points. With this the new interest rates on home loans will now start from 8 per cent as against 7.50 per cent earlier. The new rates will be effective from Monday.
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The move was inline with the central bank, which hiked repo rate by 50 basis points in the recent monetary policy to tame inflation that is hovering above the upper tolerance band for consecutive months.
“As expected, the RBI’s decision to hike the repo rate by 50 basis points on 5th August was well measured and abreast with the global economic trend. The hike in repo rate has caused some minimum fluctuation in the EMIs or the tenure on the home loans but demand for housing will remain robust. Hence, the interest rate hike of LIC HFL is in line with the market scenario,” said Y. Viswanatha Gowd, MD & CEO.
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LHPLR is the benchmark rate to which the interest rate on LIC Housing Finance Ltd’s loans is linked. The new interest rates on home loans will now start from 8 per cent. Previous home loans started from 7.50 per cent.
The Reserve Bank of India’s Monetary Policy Committee that met during 3-5 August unanimously decided to increase the policy repo rate by 50 basis points to 5.4 per cent. The announcement in the policy rate hikes was made on August 5.
Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.15 per cent; and the marginal standing facility (MSF) rate and the Bank Rate to 5.65 per cent. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.
According to the website, LIC Housing has imposed an 8.05% interest rate on home loans up to ₹50 lakh, and 8.25% on more than ₹50 lakhs to ₹2 crore for salaried and professionals who have a CIBIL score of greater or equal to 700, are eligible for these rates.
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For credit scores between 600-699, the interest rate is 8.30% on home loans up to ₹50 lakh and 8.50% on over ₹50 lakh to ₹2 crore. The rate is 8.75% (up to ₹50 lakh home loan) and 8.95% (more than ₹50 lakh to ₹2 crore) for CIBIL scores less than 600. While the rate is 8.70% (up to ₹50 lakh loan) and 8.90% (more than ₹50 lakh to ₹1 crore) on CIBIL score 101-200 OR NTC.
