HDFC Bank Raises Lending Rates: Borrowers to Face Higher EMIs from June 2026

HDFC Bank has announced an increase in its lending rates under the new Marginal Cost of Funds based Lending Rate (MCLR) effective from June 8, 2026. For various tenures the increase is between 5 and 10 basis points and therefore the EMIs of those with loans tied to MCLR will rise or the loan tenures will be extended at the next reset date.

The new MCLR is 8.05% to 8.65% compared to 8.05% to 8.60%. The overnight MCLR has risen to 8.10% from 8.05% and the one-year MCLR, which is the benchmark for many home loans, has climbed to 8.40% from 8.35%. The two-year MCLR is the most dramatic rise: up 10 basis points to 8.55%.

For borrowers, this change directly affects home, auto, and personal loans tied to MCLR. Home loan customers are particularly impacted, because one-year MCLR is the most commonly used benchmark. Floating rate borrowers will see a hit at their next reset cycle but repo-linked loans are not affected since RBI’s repo rate remained at 5.25% in its policy review for June 5.

The hike is a reflection of the bank’s high funding costs and liquidity situation that are independent of the RBI’s repo rate decision. Also, other banks such as Canara Bank have increased their MCLR recently, which indicates the tightening in the market.

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Borrowers are advised to check their loan reset dates to know when the new rates will apply. If they pay off some of the loan, at least part of the loan could help to ease the EMI burden, and repo-linked loans might be more stable since they are directly linked to RBI's policy rate. Budgeting for slightly higher EMIs is also a practical step for someone who has a long-tenure loan.

In summary, HDFC Bank’s lending rate hike will make EMIs costlier for MCLR-linked borrowers starting June 2026. The increase is small enough to warrant monitoring loan terms and planning finances carefully. Home loan customers with a one-year MCLR should expect to pay more on average for their monthly payments and repo-linked borrowers are insulated from this change.