While economic indicators were signalling an upward trend in the interest rates up to a few weeks ago, the Reserve Bank of India (RBI) chose to maintain a status quo on key policy rates, during its monetary policy review on December 5, 2018. The Monetary Policy Committee (MPC) also indicated that it would take commensurate policy measures, against chances of an upward risk. The RBI also lowered the inflation forecast to 2.7-3.2 per cent from 3.9-4.5 per cent during the previous meet, indicating that interest rates may remain stable, in the coming weeks.
The steep fall in crude oil prices, is one of the key factors that has put a brake on the upward trend in interest rates. In the last one month, several banks have increased home loan interest rates, by around 0.05 to 0.1 per cent. In a significant move, the RBI has proposed to replace the marginal cost of funds-based lending rate (MCLR) with an external benchmark, such as the repo rate, or 91 or 182 days’ treasury bill yields, or any other external benchmark, starting from April 1, 2019. So, if you are looking to buy a home on loan after April 1, 2019, then, you may get a more transparent and attractive interest rate offer at that time.
To make it easier for home buyers to select a home loan product, 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 the selected bank mentioned in the table. For example, the interest rate mentioned for Central Bank is 8.6 per cent per annum and the corresponding EMI for Rs one lakhs is Rs 874. Now, if you want to calculate the EMI for Rs 30 lakhs, then, simply multiply the EMI with 30, i.e., Rs 874 x 30 = Rs 26,220 per month (approximately) would be the EMI for 20 years tenure.
Interest rates and processing charges 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||8.85-9.1||890-906||Up to one per cent of the loan amount, subject to a minimum of Rs 10,000.|
|Bank of Baroda||8.65-9.65||877-942||100 per cent waiver of processing charges, subject to recovery of out of pocket expenses of Rs 7,500 plus GST.|
|Bank of India||8.8-8.85||887-890||0.25 per cent of the loan amount (Minimum of Rs 1,000 and maximum of Rs 20,000).|
|Canara Bank||8.75-8.95||884-897||0.50 per cent (Minimum of Rs 1,500 and maximum of Rs 10,000).|
|Central Bank||8.6||874||0.50 per cent of the loan amount, subject to a maximum of Rs 20,000.|
|Corporation Bank||8.5-9.3||868-919||No processing charge till December 31, 2018.|
|HDFC Ltd||8.8-9.7||887-945||Self-employed professionals: Up to 0.50 per cent of the loan amount or Rs 3,000, whichever is higher.
Self-employed non-professionals: Up to 1.50 per cent of the loan amount or Rs 4,500, whichever is higher (Taxes extra).
|ICICI Bank||9.1-9.35||906-922||0.5 per cent, plus applicable taxes.|
|IOB||8.7-8.95||881-897||0.5 per cent, up to Rs 25,000.|
|PNB||8.7-8.8||881-887||0.35 per cent of the loan amount (Minimum of Rs 2,500 and maximum of Rs 15,000); *Fully waived till January 31, 2019.|
|SBI||8.7-9.3||881-919||Zero till December 31, 2018, plus applicable taxes.|
|Syndicate Bank||8.8||887||Minimum of Rs 500 and maximum of Rs 5,000.|
|UCO Bank||8.65-8.9||877-893||0.50 per cent of the loan amount (Minimum of Rs 1,500 and maximum of Rs 15,000).|
|United Bank||8.65||877||0.59 per cent (Minimum of Rs 1,180 and maximum of Rs 11,800).|
|Union Bank||8.8-8.95||887-897||0.50 per cent of the loan amount, subject to a maximum of Rs 15,000 (plus applicable taxes). Note: 50 per cent concession in processing charges based on CIBIL score, till 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 December 6, 2018.