Hours after the Reserve Bank of India (RBI) increased the repo rate by 50 basis points on September 30, 2022, several banks in the country, including SBI, ICICI Bank and HDFC, have announced a hike in lending rates.
After a fourth hike in a row that amounts to a 190-basis point increase, the apex bank has now increased the repo rate to 5.90%. One percentage point is equal to 100 basis points.
Public lender SBI announced a rate hike of 50 basis points in its repo rate-linked home loans rates. With this, SBI’s EBLR now stands at 8.55% while its repo rate-linked lending rate is at 8.15%, with effect from October 1, 2022.
Housing finance company HDFC also announced a rate hike of the similar proportion, which comes into effect from October 1, 2022.
State-led Bank of India has increased its repo rate linked home loan rate to 8.75% while privately owned ICICI Bank will now charge 9.60% interest on home loans.
The rate hike by these banks would be highly detrimental for the homebuyer spirit this festive season, a time when most people conclude their property purchase decisions.
“The repo rate increase will have an impact on new home buyers because mortgage loans will rise increasing the EMIs and reducing eligibility for new loans. This, coupled with economic uncertainty, may cause some delay in the decision-making process of home buyers but we believe the overall demand will continue to remain robust,” said Rohan Pawar, CEO of Pinnacle Group.
“This move by the RBI to hike the repo rate again ahead of the festive season might temporarily limit the growth momentum of the real estate sector,” said Kaushal Agarwal, chairman, The Guardians Real Estate Advisory.
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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