HDFC chief Deepak Parekh (left) with BoB chairman A.K. Khandelwal in Mumbai on Thursday. (PTI)

Mumbai, June 15: The Housing Development Finance Corporation (HDFC) and Bank of Baroda (BoB) today ruled out immediate plans to raise home loan rates.

They don?t plan to follow the lead of ICICI Bank, which hiked its rates a day after the Reserve Bank tweaked its reverse repo and repo rates. On June 9, ICICI Bank raised its home loan rates by 50 basis points across the board. While interest on floating loans was raised to 9.5 per cent, that on fixed ones was revised upwards to 10.75 per cent.

HDFC chairman Deepak Parekh said any rate hike would depend on the corporation?s cost of funds.

?We have no plans to increase home loan rates now. We will raise them only when the cost of funds goes up. At the moment, we are reasonably comfortable,? he said while announcing a bancassurance tie-up with the Bank of Baroda for distribution of its insurance products.

Parekh, however, added there has been an upward trend not only in India but in other countries too as central banks have raised interest rates to curb inflation. He said there is pressure on cost of funds, which may force the corporation to hike rates later.

Parekh?s views were echoed by BoB chairman A.K. Khandelwal, who said the bank was not in a hurry to raise rates. ?Any hike depends on various factors such as margins and cost of funds. As long as these are managed, no increase in interest rates can be expected,? he said. ?We will act with caution and prudence. We will take our own time.?

Parekh said a 10-20 per cent correction in property prices was on the cards since real estate prices have reached a peak.

?Demand for real estate loans would certainly slow down as property prices have reached a peak,? Parekh said. The company?s home loan portfolio was likely to grow at 25-30 per cent in the current year, he added.