Based on the latest revision to the Reserve Bank of India’s repo rate, Life Insurance Corporation Housing Finance Ltd (LIC HFL) has increased the rate of its loan products. The new interest rates for home loans start at 6.9 percent, up from the previous 6.7 percent. The latest rates are effective from May 13.
“LIC Housing Finance Ltd (LIC HFL), one of India’s largest Housing Finance companies, has revised the rate of interest for its loan products on the back of the Reserve Bank of India’s (RBI) announcement on 4th May 2022, revising the repo rate. Accordingly, LICHFL has revised its rates of interest upwards across retail loan product categories,” it said.
LIC HFL MD and CEO Y Viswanatha Gowd said, “RBI has after a long time increased the policy rates and the effect is being seen across the lenders. We have kept our home loan rates competitive despite the increase in the cost of funds to support the aspirations of home buyers. For borrowers with CIBIL score 700 and above the rate hike has been limited to only 20 bps. In my view, this increase may not have a significant impact on the EMI outgo. I am confident that demand for home loans continues to be high.”
During an off-cycle MPC meeting, the RBI increased interest rates by 40 basis points to 4.40%, in response to rising inflation. Increases in repo rate signify increasing loan and EMI rates. The rate hike was the first in over a year and was the first instance of the MPC making an unscheduled increase.
Governor Das during the MPC meeting announcement said that “while economic activity is navigating the vortex of forces confronting the world with resilience on the strength of underlying fundamentals and buffers, the risks to the near-term inflation outlook are rapidly materialising, as reflected in the inflation print for March and the developments thereafter.”
