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This increase follows a hike in the base rate and benchmark Prime Lending Rate (PLR) to 9.25% and 17.85%, respectively, which took effect from September 25. This change had already contributed to high home loan interest rates.
The Reserve Bank of India’s lending regime, established in October 2019, mandates banks to link home loan rates to external benchmarks. This allows for a spread over these benchmarks, consequently impacting borrowers with high Equated Monthly Installments (EMIs).
Despite the recent changes, HDFC’s one-year and two-year MCLR remain at 9.20% and 9.25%, respectively. Other banks including ICICI Bank, Yes Bank, and Punjab National Bank (PNB) have also revised their MCLR, with changes effective from Monday, October 1, 2023.
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