HSBC India has increased interest on its floating rate home loans by 50 basis points. This is the third time the foreign bank has raised its home loan rate in the last 6 months.
The effective interest rate now is 9.5-9.75 per cent depending on the tenure of the loans. For existing borrowers, the hike in interest is applicable with effect from October 6.
"This increase follows an increase in wholesale rates and increase in cost of funds. We held off increasing rates for as long as we could," said Nicolas Winsor, head of personal finance services, HSBC India.
The foreign bank had raised its floating interest rate by 50 basis points each in April and July. Home loans account for two thirds of HSBC's retail portfolio.
"The demand for home loans is less than what it was 12 months back," said Winsor.