Housing Development Finance Corporation (HDFC) on Friday cut its lending rate by 20 basis points to 16.20 per cent amid a gradual decline in cost of borrowing across the system. The new rates will come into effect from June 12.
The move comes after the country’s largest lender State Bank of India slashed its marginal cost of funds lending rate (MCLR) by 25 basis points across all tenors.
“HDFC reduces its retail prime lending rate (RPLR) on housing loans, on which its adjustable rate home loans (ARHL) are benchmarked, by 20 basis points (bps), with effect from June 12, 2020,” the company said in a statement.
The change will benefit all existing HDFC retail home loan and non-home loan customers, it said.
Following the reduction, the new rates will now range between 7.65-7.95 per cent for existing salaried home loan customers.
Rates across the banking system have headed south in the last few months, as the Reserve Bank of India (RBI) and the government work in tandem to propel the slowing economy.
The RBI last month cut the policy rate by 40 basis points to a historical low of 4 per cent to spur growth amid the COVID-19 crisis.