HDFC Bank has hiked its marginal cost-of-funds-based lending rate (MCLR) by up to 15 basis points across select tenures with immediate effect. The new rates are in the range of 8.35-9.20% per annum.
Earlier, the bank had hiked MCLR by up to 15 basis points on select tenures.
MCLR determines the minimum interest rate by considering factors like cost of funds, operating costs, and profit margin. Banks use the MCLR to calculate interest rate on various loans, including home loans. The interest rate on home loans is set at a fixed percentage above the MCLR, known as spread.
Monday’s move marks HDFC Bank’s second successive interest rate hike following the merger with Housing Development Finance Corp (HDFC). With the merger, all HDFC loan accounts were converted into HDFC Bank loan accounts.
While customers of HDFC were not linked to an external benchmark like the repo rate, they will be given an option to do so. The latest move from HDFC Bank has come at a time when the one-year MCLR of banks got reduced to 8.63% in July from 8.65% in June, a report from CareEdge showed.