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20 Aug, 2013 02:02 PM

Home loans to get costlier as banks start increasing rates

Home loans to get costlier as banks start increasing rates Home loan equated monthly installments (EMIs) and interest rates on new loans are set to rise as the rupee slides to record lows virtually every day. The rupee hit a new historic low on Tuesday, breaching the 64 mark against the dollar in early trades.

Many private lenders have already hiked their base rates - the rate to which all loans are linked. The base rate is the rate below which a bank cannot lend, and an increase in the base rate would imply an increase in lending rates for home loans, car loans and personal loans as well.

On Monday, private lender Axis Bank increased its base rate by 25 basis points to 10.25 per cent. HDFC Bank, YES Bank, Kotak Mahindra Bank and Andhra Bank have hiked their rates earlier this month.

Consumers would start feeling the pinch once bigger lenders like State Bank of India and ICICI Bank (the country's largest public and private lender, respectively) announce rate hikes.

ICICI Bank on Friday raised interest rates on fixed deposit by 0.25-0.75 percentage points mainly on short-term deposits, which is been seen as a precursor to rate hikes.

Read full article at http://profit.ndtv.com/news/your-money/article-home-loans-to-get-costlier-as-banks-start-increasing-rates-326032?pfrom=home-lateststories



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