HDFC Bank raises marginal cost of funds lending rate by 15 basis points

HDFC Bank has announced a 15 basis point hike in its Marginal Cost of Funds Lending Rate (MCLR) across all tenor categories, effective from November 7. The increase will apply uniformly to overnight, one-month, three-month, six-month, and one-year MCLR benchmarks.

The decision will directly impact floating rate loans tied to MCLR, particularly home and personal loan products where many borrowers opt for variable rate structures. Existing customers whose loan agreements include automatic adjustment clauses will see their equated monthly installments (EMIs) increase proportionally. First-time home buyers and those planning to refinance existing loans should factor in the higher borrowing costs during this period.

MCLR serves as the minimum lending rate for banks and is used to price most retail loans in the Indian banking system. Regular revisions to MCLR reflect changes in the central bank's monetary policy stance, deposit costs, and prevailing market conditions. Banks have increased MCLR rates in recent months amid persistent inflation and liquidity tightening measures.

Borrowers with fixed-rate loans will not face immediate impact from this rate adjustment. However, those considering floating rate options or refinancing should compare different lenders' offerings and lock in rates before any further increases. Financial advisors recommend reviewing loan documentation to understand the precise mechanics of rate transmission and any caps on rate increases.