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HDFC hikes home loans rates by 50 basis points
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            Nov 21, 2004 12:59 IST  
Housing Development Finance Corporation (HDFC), the country’s largest housing finance company, Saturday announced an increase of 50 basis points in its floating interest rate on home loans.

 Housing Development Finance Corporation (HDFC), the country’s largest housing finance company, Saturday announced an increase of 50 basis points in its floating interest rate on home loans.

The revised interest rates will come into effect from Monday, said a company statement issued here.

Under the new interest structure, HDFC’s floating rate loans will start from 7.5 percent per annum, the statement said, adding that the upward revision corresponds to a change in its retail prime-lending rate.

The fixed home loan rates offered by the company, however, would continue to range between 8.25 percent and 8.75 percent.

HDFC said the revised rate structure was in line with the rates of interest in the economy, which had hardened due to rising inflation and shrinking liquidity.

After witnessing sustained downturn in the last couple of years, the spectre of high interest rates in the home loans sector looms large. Private sector ICICI Bank has already raised its home loan rates by up to 75 basis points.

Experts say many other leading housing finance companies are expected to follow suit over the next few weeks.

The interest rate hike announcements come on the heels of projections that general interest rates are set for an uptrend with the inflation rate hovering around seven percent.

--Indo-Asian News Service
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