Housing loan interest rates to go high

Banks such as HDFC and ICICI will hike their rate of lending anywhere between 25 to 75 points shortly. This roughly translates to an increase in the interest payment rate by Rupees 50 for every lakh that has been borrowed from the bank. This is bad news to borrowers all across the country. Fixed rate borrowers however can breathe a sigh of relief because the change in interest rates is not going to affect fixed rate loans.

The increase in loan rates is due to some of the banking policies which have recently been changed by the Reserve Bank of India. RBI’s policy revision has been in place in order to keep a tab on the rising inflation rates in the country. This, in combination with the liquidity situation in India and high deposit rates will force most banks to decide on changing their interest rates.

Banks such as SBI and Axis are set to decide on whether or not to increase the interest rates and by what percent next week. Banks such as UBI which have recently hiked their rates will not be considering further interest hikes any times soon.

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