Mortgage financier Housing Development Finance Corporation (HDFC) has hiked its home loan interest rate for existing borrowers by five basis points.

This comes after many large banks, including the State Bank of India (SBI), increased their marginal cost of funds-based lending rate (MCLR) by 5-10 basis points last month.

“HDFC increases its retail prime lending rate (RPLR) on housing loans, on which its adjustable-rate home loans are benchmarked, by five basis points, with effect from 1 May,” the company said in a statement.

HDFC’s home loan adjustable rate for exiting borrowers with a credit score of above 750 will now be 6.75%, up from 6.70%. For new borrowers, the interest rates will, however, remain the same, starting from 6.70%.

For loans of up to Rs 30 lakh, existing customers would be charged an interest rate of 6.85%. Loans ranging between Rs 30-75 lakh will have an interest rate of 7.10%, and those above Rs 75 lakh will have an interest rate of 7.20%. For women customers in all segments, the interest rate is 5 basis points lower.

Adjustable-rate home loan (ARHL) is also known as a floating or a variable rate loan. The interest rate in an ARHL is linked to HDFC’s benchmark rate i.e, RPLR, and any movement in HDFC’s RPLR may effectuate a change in the applicable interest rates.

Last month, SBI increased its MCLR by 10 basis points across all tenors, with effect from 15 April. The one-year MCLR has been revised to 7.1% while two- and three-year MCLRs have been raised to 7.3% and 7.4%, respectively.

The MCLR is the floor price at which banks are allowed to lend. Most loans are linked to the one-year MCLR.

Axis Bank, the third-largest private sector lender by assets in the country, and Kotak Mahindra Bank hiked their MCLR by 5 basis points. State-run Bank of Baroda also increased its MCLR by 5 basis points, with effect from 12 April.

The increase in lending rates comes after the Reserve Bank of India (RBI) had indirectly raised interest rates in the system through the standing deposit facility (SDF) as it turned its focus to tame inflation. Though the RBI did not raise repo rate, it set up the SDF at 3.75% as the floor price for banks to park their money with the central bank. Earlier, the variable reverse repo rate (VRRR) at 3.35% was the floor price.