LIC Housing Finance increases home loan interest rates starting at 8 percent

India's leading housing finance mortgage loan company LIC Housing Finance Ltd (LIC HFL), following the Reserve Bank of India (RBI)'s recent decision to hike the policy repo rate in its August 2022 policy, announced 50 basis points or 0.50 per cent increase in lending rates, with effect from Monday, August 22.

Y Viswanatha Gowd, Managing Director & Chief Executive Officer of LIC Housing Finance Ltd, while commenting on rate revision, said, "As expected, the RBI's decision to hike the repo rate by 50 basis points on 5th August was well measured and abreast with the global economic trend."

With this, the equated monthly instalments (EMIs) on home loans linked to LIC HFL's prime lending rate are also expected to go up. However, the housing finance company expects demand for housing to remain robust despite the rate hike.

"The hike in repo rate has caused some minimum fluctuation in the EMIs or the tenure on the home loans but demand for housing will remain robust. Hence, the interest rate hike of LIC HFL is in line with the market scenario," Gowd added.

LIC HFL's prime lending rate is the benchmark rate to which the interest rate on which the housing finance company's loans is linked. After the hike, the updated interest rates on home loans would start from 8 per cent, as against 7.50 per cent on previous home loans.

As per the update on the LIC HFL's official website, the rate of interest (Floating - Linked to LHPLR) on current LHPLR stands at 15.80 per cent and the rate of interest on LHPLRNH is at 15.90 per cent.

Moreover, LIC HFL, for salaried and professionals with a CIBIL score of greater or equal to 700, is now imposing an 8.05 per cent interest rate on home loans of up to Rs 50 lakh, and 8.25 per cent on more than Rs 50 lakhs to Rs 2 crore.

For people with a credit score between 600-699, the interest rate is 8.30 per cent on home loans up to Rs 50 lakh and 8.50 per cent on over Rs 50 lakh to Rs 2 crore. For people with a CIBIL score of less than 600, LIC HFL charges 8.75 per cent for home loans up to Rs 50 lakh home loan and 8.95 per cent for more than Rs 50 lakh to Rs 2 crore.

On the other hand, for individuals with a CIBIL score of 101-200 or NTC, the rate is 8.70 per cent for up to Rs 50 lakh loan and 8.90 per cent for more than Rs 50 lakh to Rs 1 crore.

LIC Housing, for individuals with a CIBIL score of equal to or greater than 700, is offering an 8 per cent interest rate on home loans greater or equal to Rs 10 lakh.

RBI, in the last three policy meets, has increased the repo rate by 140 basis points - 40 basis points in May, 50 basis points in June, and 50 basis points in August. The latest announcement regarding the policy rate hike was made on August 5.