LIC Housing Finance hikes prime lending rate by 50 basis points

According to a statement from LIC Housing Finance Ltd, "The LIC Housing Prime Lending Rate (LHPLR) has been raised by 50 basis points, or 0.50 per cent, with effect from August 22, 2022."

LIC Housing Finance Ltd, India's major housing finance company, announced a 50 basis point rise in lending rates on Monday, following the Reserve Bank of India's recent decision to raise the policy repo rate.

The LIC Housing Prime Lending Rate (LHPLR) has been raised by 50 basis points, or 0.50 per cent, with effect from August 22, 2022, according to a statement from LIC Housing Finance Ltd.

LHPLR is the benchmark rate to which LIC Housing Finance Ltd's loan interest rates are linked. The new interest rates on home loans will now begin at 8 per cent. Previous home loans began at 7.50 per cent. 

Managing Director & Chief Executive Officer of LIC Housing Finance Ltd, Y Viswanatha Gowd, commented on the lending rate increase, saying, "The RBI's decision to raise the repo rate by 50 basis points on August 5 was well-considered and in line with the global economic trend. The increase in repo rates has caused some minor fluctuations in EMIs or loan terms, but demand for housing will remain strong. Thus, the LIC HFL interest rate increase is consistent with the market scenario."

The Reserve Bank of India's Monetary Policy Committee unanimously decided to raise the policy repo rate by 50 basis points to 5.4 per cent during its meeting on August 3-5. The policy rate increases were announced on August 5.

Accordingly, the standing deposit facility (SDF) rate has been reduced to 5.15 per cent, while the marginal standing facility (MSF) rate and the Bank Rate have been reduced to 5.65 per cent. The MPC also decided to maintain its focus on the withdrawal of accommodation to ensure that inflation remains within target while supporting growth in the future.