After the Reserve Bank of India (RBI) reduced its repo rate, in February 2019, the interest rates on home loans have now started softening. Banks like PNB, HDFC, Union Bank, etc., have slashed their interest rate by up to 0.1%. Moreover, with the GST rate on under-construction housing being cut from 12% (with the input tax credit) to 5% (without an input tax credit), sentiments in the real estate market have turned positive and there could be a jump in demand. However, the upcoming general elections and expected trade deal between the US and China, are some macro events that may impact the real estate market in the coming weeks.
Banks have already put a pause on the trend of hike in the interest rate on FDs and this indicates that the interest rates on home loans may also remain subdued, or witness little downward correction.
If you are looking to buy a home, this could be a very good time, with interest rates below the 9% level, along with the reduction in GST rate to 5% and builders ready to offer under-construction properties at attractive rates. For people looking to apply for a home loan, it is important to select the right product.
To make the selection of home loan product more comfortable for the home buyers, we have presented the interest rate range, EMI and processing fees by various banks, in the table given below. The EMI has been calculated based on a loan of Rs one lakh for a tenure of 20 years. You can easily calculate the EMI for the desired amount, by multiplying loan amount (in Rs lakhs) with the EMI range corresponding to selected bank mentioned in the table. For example, the interest rate mentioned for Central Bank is 8.65 per cent per annum and the corresponding EMI for Rs one lakh is Rs 877. Now, if you want to calculate the EMI for Rs 30 lakhs, then, simply multiply the EMI with 30, i.e., Rs 877 x 30 = Rs 26,310 per month (approximately), which would be the EMI for 20 years tenure.
Interest rate and processing charge on home loan by banks (with indicative EMI)
|Lender’s name||Floating interest rate (Per cent, per annum)||EMI per Rs one lakh (in Rs)||Processing fee|
|Axis Bank||8.9-9.15||893-909||Up to 1% of the loan amount, subject to a minimum of Rs 10,000.|
|Bank of Baroda||8.65-9.65||877-942||100% waiver of processing charges, subject to recovery of out of pocket expenses of Rs7,500 plus GST.|
|Bank of India||8.7-9.6||881-939||0.25% of the loan amount (Minimum of Rs 1,000 and maximum of Rs 20,000) **Processing charges waived up to March 31, 2019.|
|Canara Bank||8.7-8.9||881-893||0.50% (Minimum of Rs 1,500 and maximum of Rs 10,000).|
|Central Bank||8.65||877||0.50% of the loan amount, subject to a maximum of Rs 20,000.|
|Corporation Bank||8.65-9.3||877-919||Up to 0.50% of the loan amount (Maximum of Rs 50,000).|
|HDFC Ltd||8.8-9.2||887-913||For salaried individual and self-employed professionals: Up to 0.50% of the loan amount or Rs 3,000, whichever is higher.
Self-employed non-professionals: Up to 1.50% of the loan amount or Rs 4,500, whichever is higher.
|ICICI Bank||9.1-9.3||906-919||0.5%, plus applicable taxes.|
|IOB||8.7-8.95||881-897||0.5%, up to Rs 25,000.|
|PNB||8.65-8.75||877-884||0.35% of the loan amount (Minimum of Rs 2,500 and maximum of Rs 15,000)
*Fully waived till March 31, 2019.
|Syndicate Bank||8.75||884||Minimum of Rs 500 to maximum of Rs 5,000.|
|UCO Bank||8.7-8.95||881-897||0.50% of the loan amount (Minimum of Rs 1,500 and maximum of Rs 15,000).|
|United Bank||8.65||877||0.59% (Minimum of Rs 1,180 and maximum of Rs 11,800).|
|Union Bank||8.7-8.85||881-890||0.50% of the loan amount, subject to a maximum of Rs 15,000 (plus applicable taxes). Note: 50% concession in processing charges based on CIBIL score, March 31, 2019.|
The EMI is based on a loan amount of Rs one lakh for a tenure of 20 years.
Interest rates are based on the floating rate system. Rates may be subject to revision after a specified tenure, depending on the bank’s terms and conditions. The EMI range is indicative and is calculated, based on the interest rates given in the table. In an actual situation, it may include other charges and fees, as per the bank’s terms and conditions. The actual interest rate may vary, based on the credit profile of the loan applicant. Data in the table is only for illustration purpose.
Data taken from the respective bank’s websites, as on March 8, 2019.