HDFC Bank recently announced an increase in its repo-linked home loan interest rates by 10-15 basis points, resulting in a new range of 9.05 percent to 9.8 percent. This change is attributed to the merger between HDFC Bank and HDFC on July 1, 2023. Following the merger, the bank transitioned from using the Retail Prime Lending Rate (RPLR) to the External Benchmark Lending Rate (EBLR) in compliance with regulatory guidelines. Despite the Reserve Bank of India (RBI) maintaining a steady repo rate of 6.50 percent since April 2023, HDFC Bank proceeded with the rate hike.

In comparison, other major private and public sector banks offer home loans at varying interest rates. For example, ICICI Bank provides rates ranging from 9 percent to 10.05 percent, effective until March 2024. State Bank of India (SBI) offers rates between 9.15 percent and 10.05 percent, while Axis Bank’s rates range from 8.75 percent to 9.65 percent. Additionally, Kotak Mahindra Bank starts at 8.70 percent. These rates are as per the information available on the respective banks’ websites.

The repo-linked lending rate is tied to the Reserve Bank of India’s repo rate, which has remained unchanged at 6.50 percent since April 2023.

This adjustment in home loan rates amid a stable repo rate underscores the complexities of the banking sector, with HDFC Bank justifying its decision based on the merger and regulatory compliance.