Home loans to cost more

The home loan party seems to be over. Get ready to shell out more as EMI (equated monthly instalments) now. Home loan companies led by Housi...

The home loan party seems to be over. Get ready to shell out more as EMI (equated monthly instalments) now. Home loan companies led by Housing Development Finance Company (HDFC), ICICI Bank and Standard Chartered Bank have hiked their rates by 50 basis points across all maturities with immediate effect.

V Vaidyanathan, Senior General Manager, ICICI Bank said the bank has increased the reference rate for the new as well as the existing customers by 50 basis points. ‘‘For the new customers we have hiked the home loan rates by 50 basis points. The hike in the home loan rates is an outcome of an increase in the processing charges,’’ he said.

Renu S Karnad, Executive Director of HDFC, said the institution has hiked its rates by 50 basis point across all the tenures.

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Citibank and Standard Chartered Bank have also hiked rates. However, a Citibank spokesperson said, “We did not lower rates on our loan product even as HDFC or ICICI Bank had slashed their respective home loan rates in the recent past. Even if these entities hike their rates by 25-50 basis points, they will be on the same plane as Citibank. So there is no possibily of a hike in the home loan rate in the immediate future.”

CICI Bank had revised its rates for home loans, deposits and its prime lending rate (PLR) during October 2004.

The floating reference rate (FRR) for ICICI Bank, which is used for determining the rate of interest for adjustable (floating) rate home loans, was increased by 50 bps. The bank’s interest rates on fixed rate home loans was hiked by 75 bps to 8.5 per cent from the 7.75 per cent with effect from November 17, 2004.

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