HDFC Bank cuts Interest Rate for Home Loans on this Tenure
RBI’s latest announcement on Repo Rate Stability witnessed Housing Loan Interest Rate Adjustments by HDFC Bank; The bank has revised its Marginal Cost of Funds-Based Lending Rates (MCLR) with effect from June 7, 2024, as updated on their website.
HDFC Bank Intimation -Review of HDFC Bank Marginal Cost of Funds-Based Lending Rates (MCLR) The Reserve Bank of India (RBI) has also decided to keep the repo rate unchanged for the eighth time in a row during this period.
In the case of Banks MCLR is 8.95% – 9.35 % On the other hand, HDFC Bank has cut its MCLR by 5 basis points (bps) for 2-year tenure, to 9.30% However, for other tenures the rates remain the same. The HDFC Bank MCLR rates are as follows:-
Overnight: 8.95% 1 Month: 9.00% 3 Months: 9.15% 6 Months: 9.30% 1 Year: 9.30% 2 Year: 9.30% 3 Year: 9.35%
MCLR is the minimum interest rate of a bank that a bank can offer as a lender. The major factors that define and calculate the MCLR include the marginal cost of funds operating expenses and tenor premium. Usually lowering the MCLR leads to less loan tenors or EMIs. However, it does not take place overnight.
The RBI’s cautious stance on the policy rates may keep borrowing costs elevated in the immediate term, the economists said. They feel it is well placed for them to also examine rate cuts later in FY 2024-25, provided inflation eases and the RBI is in a more comfortable zone.
CEO and Co-founder of Basic Home Loan Atul Monga, has said that the unchanged repo rate poses a continued challenge for potential Home buyers. Though repo rates remaining unchanged in the near term are a positive sign, it does not necessarily spell that there will be an immediate cut in interest rates. This is likely to impact first-time home buyers or the affordable housing space the most, as they are the most sensitive to changes in the rates.
