New Delhi: LIC Housing Finance Limited (LIC HFL) has become the latest mortgage financier to raise interest rates on home loans by 20 basis points or 0.2% to 6.9% from 6.7%. However, the latest interest rate hike will impact some borrowers, the lender said in its statement. The increased interest rates are applicable from Friday.
LIC Housing Finance said that for borrowers with a CIBIL score of 700 and above, the recent interest rate hike on home loans has been capped at 20 basis points or 0.20%. The lender also noted that interest rates have been increased by 25 basis points or 0.25% and 40 basis points or 0.40% for borrowers with a CIBIL score (less than 700) and customers NTC (New to Credit).
For the uninitiated, CIBIL Score is a 3-digit numerical summary of a customer’s credit history. The credit score ranges from 300 to 900. The better the CIBIL score, the better the credit rating.
LIC HFL raised mortgage rates following the Reserve Bank of India’s (RBI) decision to raise repo rates by 40 basis points to 4.40%.
“After a long time, RBI has raised policy rates and the effect is felt across all lenders. We have kept our home loan rates competitive despite the rising cost of funds to support homebuyer aspirations” , said the general manager of LIC HFL. and CEO Y Viswanatha Gowd said. Also Read: LIC IPO: Will Bidders Make Profits or Suffer Losses? Check what GMP, expected listing price suggests
Following the RBI’s decision, several public and private banks and lenders raised interest rates on home loans based on the marginal cost of funds and the repo rate. Some of the banks include HDFC Bank, Canara Bank, Bank of Maharashtra and Karur Vysya Bank. Also Read: SBI Q4 Profit Jumps 41% to Rs 9,114 Crore on Lower Bad Loans