Demonetization: Discernible Effects On Home Loan EMI and Home Loan Interest Rate
This New Year, to bring smile to your face and to your family members, major banks of the country have slashed their home loan interest rates to a large extent. Now you can avail a home loan at the cheapest home loan rates with the lowest monthly EMIs you have ever imagined. Largest home loan providers viz. State Bank Of India, HDFC Bank, Punjab National Bank, IDBI Bank, ICICI Bank, Kotak Mahindra Bank, United Bank OF India, Bank of Baroda, Dena Bank, LIC HFL, State Bank of Travancore (SBT), Central Bank of India, Bandhan Bank, Yes Bank, India Bulls, Oriental bank of Commerce and Union Bank Of India. Other leading banks are also in the process to lower their lending rates
(Updated on 02.01.2017) Home Loan – Compare Home Loan on the basis of ☛ Eligibility ☛ Rate of Interest (ROI) ☛ Processing Fee ☛ Prepayment Charges from top PSU & Private Banks such like ✓ SBI ✓ HDFC ✓ ICICI ✓ Axis ✓ Bank of Baroda ✓ Union Bank & more.
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The impact of demonetisation is quite diverse and intense in nature. The move to curb black money, fake currency and terror financing has brought a proportionate effect on Indian economy. The recent ban on Rs. 500 and & Rs. 1000 has created a lot of buzz in the whole country with criticisms, views, and observations pouring down from every where.
Lots of questions filling up the scrolling news or making headlines everyday. Popular among them are, will demonetisation bring any favorable effect on Home Loans? Will banks cut down Home Loan Interest Rates? Will there be any change in Home Loan EMIs for existing customers or for future Home loan borrowers?
Theoretically and to a greater extent practically, demonetization results in huge cash flow to banks. As there is huge cash deposits, there is more money with banks and this tend to high liquidity in bank reserves. Therefore, reduction of interest rates shall be done by banks in order to channelize such huge liquid funds.
According to financial experts, the country will see a substantial cut down of interest rates for education loans, home loans, car loans and medical loans very soon. As predicted, recently, after demonetization, major banks have slashed down their fixed deposit interest rates to an observable amount. It is anticipated that the cut in fixed deposit rates will lead to lowering of lending rates for home loans.
What will be the benefits?
Earlier banks were using Base rate to determine interest rate in which RBI’s Repo rate was not part of it. RBI’s new Marginal Cost of Funds based Lending Rate (MCLR) method has helped banks to lower down their interest rates on every loans, making it reachable to the common masses. Last year RBI’s decision to reduce repo rate by 25 bps have led all banks to provide loans to every borrower at lower rate of interest. Due to huge fund flows, it can be foreseen that MCLR may change and in turn it will have impacts on home loan interest rates and also on other loans. This would come as a relief to people who cannot afford the high EMIs on housing loans.
Suppose, there is 1 bps rate cut by the apex bank from the existing repo rate 6.25% to 5.25%, then there will be a huge impact on the lending rates. As all commercial banks will get money at a cheaper rate from RBI then all banks are compelled to cut down their lending rates from 1% to 2%. If there is a cut down of 1% to 2% interest rates then Home loan interest rates are likely to go down from 9.25% to 8.25% or 7.25% and this will led to the cheapest home Loan EMIs. This would come as a relief to people who cannot afford the high EMIs on housing loans.
So, a lower interest rate means lower EMIs, longer tenure, cut down in total interest amount paid and other benefits to count on. ‘Achee din’ for all home buyers is not a distant dream any more.
HOME LOAN MCLR RATE (HISTORICAL DATA) JANUARY 2017
|Bank Name||Reduced MCLR Basis Points (bps)||Previous MCLR (%)||Current MCLR (%)||Date||Effective From|
|State Bank of India – SBI||10||9.15%||8.25%||01.01.2017||01.01.2017|
|Punjab National Bank – PNB||Unchange||9.40%||9.40%||01.10.2016||01.10.2016|
|Union Bank of India – UBI||5||9.50%||9.45%||01.10.2016||01.10.2016|
|Bank of Baroda – BOB||+10||9.30%||9.40%||01.10.2016||01.10.2016 till 31.12.2016|
|Kotak Mahindra Bank||Unchanged||9.60%||9.60%||01.10.2016||01.10.2016|
|Standard Chartered Bank||20||9.45%||9.25%||01.10.2016||01.10.2016|
HOME LOAN BASE RATE (HISTORICAL DATA) JANUARY 2017
|Bank Name||Reduced Base Rate Basis Points (bps)||Previous Base Rate (%)||Current Base Rate (%)||Date||Effective From|
|State Bank of India (SBI)||40||9.7||9.3||29.09.2015||05.10.2015|
|Punjab National Bank (PNB)||40||10||9.6||30.09.2015||01.10.2015|
|Oriental Bank of Commerce (OBC)||209.||9.9||9.7||30.09.2015||05.10.2015|
|Bank of Baroda||25||9.9||9.65||30.09.2015||05.10.2015|
|Kotak Mahindra Bank||25||9.75||9.5||01.10.2015||05.10.2015|
|State Bank of Travancore||25||10.15||9.95||01.10.2015||05.10.2015|
|State Bank of Bikaner and Jaipur||25||9.95||9.7||01.10.2015||05.10.2015|
|Central Bank of India||25||9.95||9.7||01.10.2015||08.10.2015|
|Bank of India||25||9.95||9.7||05.10.2015|
|Bank of Maharashtra||30||10.00||9.7||05.10.2015|
|Union Bank of India||25||9.90||9.65||05.10.2015|
What is Home Loan?
Home Loan is a Secured Loan offered against the security of a house/property which is funded by the bank’s loan, the property could be a personal property or a commercial one. The Housing Loan is a loan taken by a borrower from the bank issued against the property/security intended to be bought on the part by the borrower giving the banker a conditional ownership over the property i.e. if the borrower is failed to pay back the loan, the banker can retrieve the lent money by selling the property.
Home Loan Interest Rates Updated on:
Saving up for that first home isn’t easy – especially during these days of unreasonably high house prices. A clear understanding and comparison of these costs can help you choose between two loan providers offering similar interest rates.
State Bank of India (SBI)
SBI Home Loans come to you on the solid foundation of trust and transparency built in the tradition of State Bank of India.
✓ Borrowers’ category (Women): 20 bps above the MCLR i.e. 9.35% p.a (Effective from 01.10.2016)
✓ Borrowers’ category (Others): 25 bps above the MCLR i.e. 9.40% p.a. (Effective from 01.10.2016)
Know Saving after MCLR effective from 01.10.2016 : SBI Home Loan Interest Rate EMI (Monthly):
|Loan Amount||₹ 10 lakh||₹ 15 lakh||₹ 20 lakh|
|Tenure||20 Years||20 Years||20 Years|
|Old Interest Rate||9.40%||9.40%||9.40%|
|New Interest Rate||9.35%||9.35%||9.35%|
|OLD EMI||₹ 9256||₹ 13884||₹ 18512|
|New EMI||₹ 9224||₹ 13835||₹ 18447|
|Savings||₹ 32||₹ 49||₹ 65|
✓ The woman should be the sole applicant or first co-applicant of Home Loan and also
✓ The property proposed to be financed should be either in the sole name of the woman borrower or she should be the first owner in case of joint ownership
SBI Home Loans Unique Advantage
✓ No Processing Charges (Limited Period Offer)
✓ Package of exclusive benefits.
✓ Low interest rates. Further, we charge interest on a daily reducing balance!!
✓ No hidden costs or administrative charges.
✓ No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan.
✓ Over 15,969 branches nationwide, you can get your Home Loan account parked at a branch nearest to your present or proposed residence.
LIC Housing Finance
LIC Housing Finance Ltd. is one of the largest Housing Finance company in India. Incorporated on 19th June, 1989 under the Companies Act, 1956, the Company was promoted by LIC of India and went public in the year 1994.
LIC Housing Finance offers competitive interest rates, no hidden cost, loan approval on the basis of customer financials.
✓ Home Loan Interest Rate: 9.60% for loan upto Rs. 3 Crore
✓ Processing Fee: 1.5% (For ING Salary Account Holder), other wise 1.75% – 2%
Know Saving after 30 bps cut in LIC Housing Finance Interest Rate (Monthly):
|Loan Amount||₹ 15 lakh||₹ 20 lakh||₹ 25 lakh|
|Tenure||15 Years||15 Years||15 Years|
|Old Interest Rate||9.90%||9.90%||9.90%|
|New Interest Rate||9.60%||9.60%||9.60%|
|Savings||₹ 273||₹ 365||₹ 455|
HDFC is a leading provider of Housing Finance in India. HDFC Ltd offers pleasant interest rates, no hidden charges, repayment options, best services & more.
✓ Home Loan Interest Rate: For Women* (Any Loan Amount) : 9.40% to 9.90% & Any Loan Amount : 9.45% to 9.95%
✓ Processing Fee: Up to 0.50% of the loan amount or Rs.2,000 whichever is higher, plus applicable taxes.
Know Saving after 25 bps cut in HDFC Ltd. Home Loan Interest Rate (Monthly):
|Loan Amount||₹ 20 lakh||₹ 25 lakh||₹ 30 lakh|
|Tenure||25 Years||25 Years||25 Years|
|Old Interest Rate||9.45%||9.45%||9.45%|
|New Interest Rate||9.40%||9.40%||9.40%|
|OLD EMI||₹ 17404||₹ 21756||₹ 26107|
|New EMI||₹ 17335||₹ 21669||₹ 26003|
|Savings||₹ 69||₹ 87||₹ 104|
Union Bank of India (UBI)
Union Bank of India was established on 11th November 1919 with its headquarters in the city of Bombay now known as Mumbai.
Union Bank has been playing a very proactive role in the economic growth of India and it extends credit for the requirements of different sectors of economy. Industries, exports, trading, agriculture, infrastructure and the individual segments are sectors in which the bank has deployed credit to spur economic growth and to earn from a well diversified portfolio of assets.
✓ Union Bank Home Loan Interest Rate: 9.55% – 9.60%
✓ The applicable processing charges are 0.50% of loan amount subject to a maximum of Rs.15,000/- plus service tax as applicable)
Punjab National Bank (PNB)
Punjab National Bank (PNB) reaches out to you with fast, friendly and most convenient home loans under Normal and Flexible variants.
✓ PNB Home Loan Interest Rate: Punjab National Bank Base Rate = 9.45% w.e.f. 01.06.2016
✓ Processing Fee: As applicable under Bank’s regular Housing Loan Scheme for public.
Know Saving after MCLR effective from 01.09.2016 in PNB Home Loan Interest Rate EMI (Monthly):
|Loan Amount||₹ 20 lakh||₹ 25 lakh||Canara Bank Home Loan ₹ 30 lakh|
|Tenure||240 Months||240 Months||240 Months|
|Old Interest Rate||9.60%||9.60%||9.60%|
|New Interest Rate||9.45%||9.45%||9.45%|
|Savings||₹ 196.00||₹ 245.00||₹ 294.00|
PNB Home Loans Unique Advantage
✓ Option to choose between Floating and Fixed interest rates.
✓ Longest Repayment period of 25 years
✓ Flexible/graduated repayment option
✓ No hidden charges
✓ Quick and Fast processing
✓ Lowest EMI of Rs.919/-* per lac for a 25 years loan
✓ EMI is applicable to all existing and new customers
✓ Avail benefit of lower EMI by shifting account with Punjab National Bank.
PNB Housing Finance
PNB Housing Finance Limited (PNBHFL) offers comprehensive range of home loan such like Home Construction Loans, Home Improvement Loans, Home Extension Loans, Home Purchase Loans and Plot Loans. PNBHFL offers doorstep services, various repayment options & more.
Rates are applicable w.e.f. October 13th, 2015
✓ Home Loan Interest Rate: 9.75% (for salaried) 9.95%-10.45% (For Self Employed Non Professionals)
✓ Processing Fee: 0.5%.
DHFL Home Loan
DHFL was established by Late Shri Rajesh Kumar Wadhawan (16th April, 1949-30th September, 2000), a visionary Indian businessman.
Avail a Home Loan of up to Rs. 500,00,000 (minimum loan amount Rs. 1 lac) but not exceeding 85% of the cost of property (including stamp duty and registration fees) or 80% of market value, whichever is lower.
✓ Home Loan Interest Rate: 9.55%
✓ Processing Fee:
☑ Salaried individuals (SAL) / Self-Employed Professionals (SEP) : ₹ 5000* to ₹ 20,000*
☑ Self-Employed Non Professionals (SENP) : 1.5%*
*Service Tax and Cess as applicable
|Loan Amount||₹ 30 lakh||₹ 40 lakh||₹ 50 lakh|
|Tenure||20 Years||20 Years||20 Years|
|EMI||₹ 28,062||₹ 37,416||₹ 46770|
Bank of Baroda (BOB)
It has been a long and eventful journey of almost a century across 25 countries. Starting in 1908 from a small building in Baroda to its new hi-rise and hi-tech Baroda Corporate Centre in Mumbai, is a saga of vision, enterprise, financial prudence and corporate governance.
✓ Home Loan Interest Rate: 9.65%
✓ Processing Fee: 0.25% of loan amount Min.Rs.1, 000 and Max. Rs.20,000/-
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary.
ICICI Bank is India’s largest private sector bank with total assets of Rs. 5,946.42 billion (US$ 99 billion) at March 31, 2014 and profit after tax Rs. 98.10 billion (US$ 1,637 million) for the year ended March 31, 2014.ICICI Bank currently has a network of 3,845 Branches and 12,012 ATM’s across India.
✓ ICICI Home Loan Interest Rate: 9.40% (For Female),9.45% – 9.70% (For Others)
✓ Processing Fee: 0.50% – 1.00% of the loan amount or Rs. 2000/- whichever is higher + applicable Service Tax & Surcharge.
Bank of India
Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalized along with 13 other banks.
✓ Bank of India Home Loan Interest Rate: 9.95%
✓ Processing Fee: @0.25% of loan amount Min.Rs.1, 000 and Max. Rs.20,000/-
Allahabad Bank, the oldest joint stock Bank of the country, was set up in Allahabad on April 24, 1865 by a group of Europeans. The first directors of the Bank were Mr. G. Brown, Mr. T. Moss, Mr. S. Bird and Mr. A. W. Wollaton. At that juncture, organized industry, trade and banking had just started taking shape in India.
✓ Home Loan Interest Rate: 9.95%
upto 30 lacs: 0.60% of the loan amount subject to max. Rs.12000
30 lacs – 75 lac: 0.45% of the loan amount subject to max. Rs.24000
above 75 lacs – 300 lacs: 0.35% of the loan amount subject to max. Rs.60000
above 300 lacs: 0.25% of the loan amount subject to max. Rs.70000
Canara Bank offers home loans for the purpose of construction / purchase / repairs / additions / renovations of residential house / flat including the purchase of land and construction thereon.
Canara Bank offers Repayment, Prepayment options as per customer choice.
✓ Canara Bank Home Loan Interest Rate: Upto Rs.100 lakhs One Year MCLR + 0.20% i.e., @ 9.65% (presently) & Above Rs. 100 lakhs One Year MCLR + 0.30% i.e., @ 9.75% (presently)
✓ Processing Fee: Nominal processing fee of 0.50% (Min Rs.1500/- and Max. Rs.10,000/-) is charged.
Canara Bank MCLR Rates – effective from 01.09.2016
|TENOR OF MCLR||MCLR|
|One Month MCLR||9.10%|
|Three Month MCLR||9.20%|
|Six Month MCLR||9.25%|
|One year MCLR||9.35%|
United Bank of India
United Bank of India (UBI) is one of the 14 major banks which were nationalized on July 19, 1969. Its predecessor the United Bank of India Ltd., was formed in 1950 with the amalgamation of four banks viz. Comilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla Union Bank Ltd. (1922) and Hooghly Bank Ltd. (1932) (which were established in the years indicated in brackets after the names). The origin of the Bank thus goes as far back as to 1914. As against 174 branches, Rs. 147 crores of deposits and Rs. 112 crores of advances at the time of nationalization in July, 1969, today the Bank is 100% CBS enabled with 1999 branches and offices and is having a Total business of more than Rs 2 lac crore. Presently the Bank is having a Three-tier organizational set-up consisting of the Head Office, 35 Regional Offices and the Branches.
✓ United Bank Home Loan Interest Rate: 9.75%
✓ Processing Fee: 0.50% of the loan amount minimum.
Dena Bank, in July 1969 along with 13 other major banks was nationalized and is now a Public Sector Bank constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. Under the provisions of the Banking Regulations Act 1949, in addition to the business of banking, the Bank can undertake other business as specified in Section 6 of the Banking Regulations Act, 1949.
✓ Dena Bank Home Loan Interest Rate: Up to Rs.75 Lacs : 9.70% (Floating) & More than Rs. 75 Lacs : 9.95% (Floating) w.e.f. 05.10.2015
✓ Processing Fee: 0.50% of sanctioned limit..
Established on 15th August 1907 as part of the Swadeshi movement Serving the nation with a team of over 19429 dedicated staff as on 31.03.2014, Total Business crossed Rs.2,86,633 Crores as on 31.03.2014
✓ Indian Bank Home Loan Interest Rate: 9.95%
✓ Processing Fee: 0.25% of loan amount with a maximum of Rs.20,000
Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.
✓ Axis Bank Home Loan Interest Rate: 9.45% p.a. to 9.50% p.a. (for salaried) & 9.55% p.a. to 9.60% p.a. (for self employed)
✓ Processing Fee: Upto 1% of the loan amount subject to minimum of Rs.10,000/-
Axis Bank Home Loan Advantage
✓ Axis Bank offers flexible rates for home loan customers
✓ Axis Bank offers balance transfer facility
✓ Axis Bank offers doorstep service
✓ Nil prepayment charges*
* These benefits valid only on floating interest rate Home Loans.
✓ Accelerated and translucent processing
✓ High tenure for lesser EMIs.
Citi India began operations over a century ago in 1902 in Kolkata and today is a significant foreign investor in the Indian financial market. As promoter-shareholder, Citi has played a leading role in establishing important market intermediaries such as depositories, credit bureau, clearing and payment institutions. Operating 44 full-service Citibank branches in 28 cities, it is the preferred banker to 45,000 small and mid-sized companies.
✓ Citibank Home Loan Interest Rate: 9.85% – 9.95%
✓ Processing Fee: 0.25% (For Salaried) 0.5% (For Self Employed)
Citibank Home Loan Unique Advantage
✓ Citibank offers easy home loan up to ₹ 10 crore on the basis of customers eligibility
✓ Citibank offers a flexible repayment option tenure up to 25 years
✓ Citibank offers home loan up to 80% of the property value.
The history of Federal Bank dates back to the pre-independence era. Though initially it was known as the Travancore Federal Bank, it gradually transformed into a full-fledged bank under the able leadership of its Founder, Mr. K P Hormis. The name Federal Bank Limited was officially announced in the year 1947 with its headquarters nestled on the banks of the river Periyar. Since then there has been no looking back and the bank has become one of the strongest and most stable banks in the country.
✓ Federal Bank Home Loan Interest Rate: 9.95%-10.10%
✓ Processing Fee: 0.50% of the limit sanctioned with a minimum of 3,000+ST, maximum of 7,500+ST.
Started about 109 years ago in 1906, with an initial capital of just Rs.5000/-, Corporation Bank has recorded Rs. 3,27,294 Crore mark in business and even far more, with over 9339 service outlets across the nation, served by committed and dedicated 18,000 plus Corp Bankers. Proof of which is seen in its enviable track record in financial performance. We have many reasons to cheer, predominant of them is, being able to participate in nation building by empowering the rural and urban population alike. Today, we are proud that we are significant contributors to the growth of the country’s economy.
✓ Corporation Bank Home Loan Interest Rate: 9.90%
✓ Processing Fee: 0.50% of Loan amount (Max.Rs.50,000/-)
Standard Chartered Bank
Standard Chartered Bank offers attractive interest rate, flexible tenures, refinancing options, tax benefits, repayment option & more on Home Loan.
✓ Standard Chartered Home Loan Interest Rate: 9.75%
✓ Processing Fee: Between 0.5 % – 1.50%
State bank of Travancore
The bank was established in 1945 as the Travancore bank Ltd, at the initiative of C. P. Ramaswami Iyer, then Divan of Travancore. Following violent resentment against the dictatorial rule of Sir. C.P.Ramaswamy Iyer, the bank no longer credits his role. Instead, the Bank now credits the Maharaja of Travancore as the founder, though the Raja had little to do with the founding.
✓ State Bank of Travancore Home Loan Interest Rate: 9.95%
✓ Processing Fee: Limit upto Rs.25,000 – Nil Limit above Rs.25,000 to Rs.2 lacs – 0.56% of the loan amount (Max.Rs.500/-) Limit above Rs.2 lacs – 0.56% of the loan amount maximum Rs.10000/- Processing charge upto 30-06-2014 will be 0.281% (50% concession upto 30-06-2014)
Vijaya Bank today is a PAN India Institution, serving diverse sectors of the society. The bank has built a network of 1512 branches, 48 Extension Counters and 1528 ATMs, that span all 28 states and 4 union territories in the country. The Bank has the highest number of branches in its home state Karnataka.
✓ Vijaya Bank Home Loan Interest Rate: 9.65%
✓ Processing Fee: No Processing, Documentation and Inspection charges upto 31st March 2015.
Andhra Bank was founded by the eminent freedom fighter and a multifaceted genius, Dr. Bhogaraju Pattabhi Sitaramayya. The Bank was registered on 20th November 1923 and commenced business on 28th November 1923 with a paid up capital of Rs 1.00 lakh and an authorised capital of Rs 10.00 lakhs.
✓ Andhra Bank Home Loan Interest Rate: 10.25%
✓ Processing Fee: 0.50 % of loan amount subject to maximum of Rs.10000/- + applicable tax. (No processing charges at present till 31-03-2014) Read More.
How will Banks decide home loan eligibility?
Banks assess the customer’s repayment capacity while deciding on the home loan eligibility. Repayment capacity is based on factors such as income, age, qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of occupation and savings history.
What are the different interest rate options you offer?
✓ Adjustable Rate Home Loans
✓ Fixed Rate
What Documents do you need for a loan approval?
|Salaried Customers||Self Employed Professionals||Self Employed Businessman|
|Application form with photograph||Application form with photograph||Application form with photograph|
|Identity and Residence Proof||Identity and Residence Proof||Identity and Residence Proof|