Mortgage lender LIC Housing Finance (LIC HFL) raised the rate on home loans for select borrowers by 20 basis points from 6.7% to 6.9% on Friday.
For borrowers with a CIBIL score of 700 and above, the rate hike has been capped at just 20 basis points, LIC Housing Finance said in a statement, adding that the revised rates will apply from Friday.
For customers with a CIBIL score less than 700, the maximum increase is 25 basis points (bps). For NTC (New to Credit) customers, the increase is 40 basis points.
The CIBIL score is a three-digit numerical summary of a customer’s credit history. It is between 300 and 900. The closer the score is to 900, the better the credit rating.
The hike in the lending rate follows a 40 basis point hike in the repo rate to 4.40% by the Reserve Bank of India last week.
“RBI has hiked interest rates after a long time and the effect is being felt by all lenders. We have kept our home loan rates competitive despite the increase in financing costs to support homebuyer aspirations,” said Y. Viswanatha Gowd, Managing Director and CEO of LIC HFL.
Many banks including HDFC Bank, Canara Bank, Bank of Maharashtra and Karur Vysya Bank have adjusted their lending rates based on the marginal cost of funding and the repo rate.