HDFC hikes home loan rates to 13.5%

Home loan major HDFC Ltd has raised its prime lending rate by 0.75 per cent to 13.5 per cent in a bid to manage its rising cost of funds.

The floating rates for existing and new borrowers have been raised by 0.75 per cent, while fixed rates have been hiked by one per cent to 12 per cent from 11 per cent with effect from March 1, an HDFC Ltd spokesperson said in Mumbai.

HDFC has seen its cost of funds rise following the increase in rates by banks. It has also raised its deposit rates under the privilege scheme where it offers 9.55 per cent on 30-month deposits to senior citizens.

For other individuals, the rate of return is 9.3 per cent. Unlike other lenders, HDFC's rates vary according to loan size and not the tenure of the loan. Loans below Rs 500,000 carry interest at the rate of 10.5 per cent, while loans above Rs 10 lakh (Rs 1 million) carry an interest rate of 10.25 per cent, he said.