Mortgage lender LIC Housing Finance joined peers and hiked its lending rate by 0.35 per cent.
The move, which comes a week after an increase by bigger rival HDFC by a similar quantum, entails that the minimum rate of interest will get revised to 8.65 per cent for the best-rated borrower.
In a statement, the company said it has increased the LIC Housing Prime Lending Rate (LHPLR), to which the interest rate on its loans is linked, by 0.35 per cent.
"The increase in rates is in tune with the market conditions," the company's managing director and chief executive Y Viswanatha Gowd said.
He added that there is good sustenance in the home-buying activity in the real estate sector at present.
It can be noted that the Reserve Bank has hiked the repo rate, at which it lends to the system in five consecutive moves by a cumulative 2.25 per cent since May this year.
Lenders in the system have responded to the hikes affected by the RBI.