Home loan tenures for existing customers and EMIs for new ones are set to rise as market leader HDFC announced a 0.75 percentage point hike in retail prime lending rate beginning December 1.
This will lead to an increase in rates for both existing and new home loan rates beginning December 1.
Other lenders are expected to follow suit.
A Rs 20 lakh loan taken for 15 years in January at 8.5% interest would touch 9.75% as a result of this hike and the one in September (50 basis point).
Keeping the EMI constant, this rate hike would raise the loan tenure by 30 months from 180 months to 210 months.
While lending rates for existing customers will go up by 75 basis points, those for new customers for loans up to Rs 75 lakh will go up by 50 basis point to 9.5% and for loans above Rs 75 lakh by 75 basis point to 9.75%.
"This is in line with rates in the economy, which have hardened due to rising inflation and shrinking liquidity in the domestic market," said HDFC.