HDFC Bank: Big shock for HDFC Bank account holders. HDFC Bank, the largest private sector bank in the country, has surprised many of its customers by increasing the rates on home loans. If you have a home loan with HDFC Bank or are considering taking out a new loan, it could be more expensive for you now. The bank has made changes to its Marginal Cost of Funds Based Lending Rate (MCLR), which came into effect on July 7, 2026. While some interest rates have been reduced, others have been raised for different time periods.
HDFC Bank’s Updated Rates:
– The overnight MCLR has been decreased by 5 basis points, from 8.10% to 8.05%.
– The one-year MCLR has been raised by 5 basis points, from 8.40% to 8.45%.
– The three-year MCLR has also been increased from 8.65% to 8.70%.
– The rates for 1-month, 3-month, 6-month, and 2-year MCLR remain the same at 8.05%, 8.20%, 8.35%, and 8.55%, respectively. The MCLR rates at HDFC Bank now range from 8.05% to 8.70%.
Impact on Home Loan Holders:
– The 1-year MCLR is a commonly used rate for determining home loan interest rates. Therefore, customers whose home loans are linked to the 1-year MCLR may see a slight adjustment in their Equated Monthly Installments (EMI) or loan duration at the next interest rate review. However, the impact will vary for each customer based on their loan conditions.
Understanding MCLR:
– MCLR stands for Marginal Cost of Funds Based Lending Rate, which is the lowest interest rate at which banks can lend money. Introduced by the Reserve Bank of India (RBI) in 2016, this system ensures that changes in bank interest rates are promptly passed on to customers.
Earlier Changes by HDFC Bank:
– Previously, HDFC Bank had lowered its base rate from 8.80% to 8.70% starting from June 24, 2026. The benchmark prime lending rate (BPLR) was also reduced from 17.30% to 17.20%.
Will it affect home loan holders?
The 1-year MCLR is commonly used to determine home loan interest rates. Customers whose home loans are linked to the 1-year MCLR may experience a slight change in their EMI or loan term at the next interest rate review. The Reserve Bank of India (RBI) has tightened regulations governing the sale of financial products or services by banks and regulated entities. The move aims to prevent mis-selling of financial products by lenders, curb unfair marketing practices, and tighten regulations on customer consent, disclosure, and sales practices.