LIC Housing Finance increases home loan rates; check details

Life Insurance Corporation Housing Finance Ltd (LIC HFL) has increased the rate of its loan products following Reserve Bank of India’s (RBI) revision of repo rate. The new interest rates on home loans start from 6.9 per cent, up from the previous 6.7 per cent. The latest rates are effective from May 13. 

“LIC Housing Finance Ltd (LIC HFL), one of India’s largest Housing Finance companies, has revised the rate of interest for its loan products on the back of the Reserve Bank of India’s (RBI) announcement on 4^th May 2022, revising the repo rate.  Accordingly, LICHFL has revised its rates of interest upwards across retail loan product categories,” it said. 

LIC HFL MD and CEO Y Viswanatha Gowd said, “RBI has after a long time increased the policy rates and the effect is being seen across the lenders.  We have kept our home loan rates competitive despite the increase in the cost of funds to support the aspirations of home buyers.  For borrowers with CIBIL score 700 and above the rate hike has been limited to only 20 bps. In my view, this increase may not have a significant impact on the EMI outgo. I am confident that demand for home loans continues to be high.”

The RBI had, in an off-cycle MPC meeting decided to increase interest rates by 40 bps to 4.40 per cent due to rise in inflation. An increase in repo rates signify increasing loan and EMI rates. This was the first-rate hike since August 2018 and the first instance of the MPC making an unscheduled increase in the repo rate.

Governor Das during the MPC meeting announcement said that “while economic activity is navigating the vortex of forces confronting the world with resilience on the strength of underlying fundamentals and buffers, the risks to the near-term inflation outlook are rapidly materialising, as reflected in the inflation print for March and the developments thereafter.” 

Also read: MPC expects inflation to rule at elevated levels: RBI Gov Shaktikanta Das

Also read: RBI Guv Das announces hike in interest rate by 40 bps to 4.40% in 'off-cycle' MPC meet