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Having an elegant home is every person’s dream as it is one of the most important assets which can be possessed. Most property buyers go for a home loan to buy property in India. Perhaps, escalating property prices is one of the major hindrances while buying a home. It is not just the property rates that hit the customer, but also the high interest rates. Apart from these interruptions, the property buyers also have to experience various complications while trying to look for the best home loan rates. Major banks such as ICICI, SBI, IDBI, Syndicate, HDFC and others provide different packages of home loan interest rates.
An interest rate on a home loan is the amount which is paid by the customer in lieu of the loan which is provided by the financial institution or the bank. The concept of home loan interest rate is a vital aspect while seeking a home loan. A customer has to carefully decide the right home loan interest rate package and the type of bank to opt for. This decision can be taken depending on the interest amount, the home loan, the home loan tenure and the EMI fixed for repayment. The home loan rates are decided based on these principles.
It is very important to choose a bank with lower interest rates because if the interest rate is higher, the customer has to pay a higher EMI while if the interest rate is lower the customer has to pay only a lower EMI. This will save a lot of money for the customer as well.
A base rate is the least interest rate by a bank below which it cannot lend. This can exclude the DRI advances and the loans to the bank’s own employees and depositors against their own deposits.
One of the most important factors on which the interest rate is based is the bank’s ‘Base rate’. The introduction of the base rate was levied by the RBI with effect on July 2010. The base rate is declared by every bank once in every quarter of the year and differs from each bank. The fixing of a bank’s base rate can be decided by the bank on its own but the bank will not be allowed to change the methodology, once it is chosen. It is the responsibility of the bank to document the influx of the base rate on a continuous basis.
The base rate calculation review will be done by the RBI by following a set system for calculation. Earlier, the process of BPLR (benchmark prime lending rate) was used to review a bank’s base rate. With the invent of the new policy of documenting the base rate, it has become easier to carry the task in a precise and fair manner even though the customer has a vague idea about the base rate concept. This technique is better than the former BPLR technique.
Of late, the RBI has barred the concept of lending below base rates; but for a selected group of loans such as employee loans, differential Interest rate loans to SC/ST, loan against its own fixed deposits and others are allowed. Hence, the customer is benefited when the market rate softens as the new borrowers will have many options unlike earlier. If a base rate is fixed at a bank, the same will be followed by the corporates and home loan seekers.
The fall in the interest rates in the market will force the banks to reduce their base rates to the new customers with the previous base rate. Thus, one of the reasons of the fall in the base rate is the fall in the market interest rates. The reduced base rates will be applicable to both old and new customers.
The calculation of the base rate
As mentioned earlier, the calculation of the base rates as not precise earlier. Factors like the cost of funds, margin and the administrative costs were considered to calculate the base rates. The factors for the calculation of the base rate include-
|
BANK NAME |
FLOATING INTEREST RATE |
PROCESSING FEE |
PREPAYMENT CHARGES |
|
ICICI Bank |
10.10 per cent (for women); 10.15 per cent (for others) |
0.50 per cent of loan amount upto 1 crore |
N.A |
|
State Bank Of India |
10.10 per cent (For Women), 10.15 per cent (For Others) |
Up to 25 lakh : 0.25 per cent of loan amount of minimum Rs.1000 25-75 lakh : Rs.3,250 75 lakh & above : 5,000 |
Nil |
|
HSBC Bank |
10 – 10.20 per cent (for Salaried) 10.15 – 10.35 per cent (for Self Employed) |
1 per cent of the loan amount applied for, subject to a minimum of Rs 10000 plus service tax. This fee is payable on application and is not refundable |
Nil |
|
HDFC Ltd |
TruFixed Plus Loan: 10.15 – 10.65 per cent (Fixed for 2-3 yrs) 10.25 – 10.75 per cent (Fixed for 10yrs) else 10.15 per cent |
0.5 per cent or maximum 10,000+service tax (12.36 per cent) |
No prepayment charges shall be payable for partial or full prepayments irrespective of the source |
|
LIC Housing |
10.10 per cent (Fixed for 2 yrs) |
Up to 50 lakh : 10,000 +(Service tax) 50 lakh & above : 15,000 +(service tax) |
Nil |
|
AXIS Bank |
10.40 per cent (Fixed for 20yrs), else 10.15 per cent (For Salaried); 10.65 per cent (Fixed for 20 yrs), else 10.40 per cent (For Self Employed) |
Upto 1 per cent of the loan amount subject to minimum of Rs.10,000 |
Nil |
|
Standard Chartered |
10.26 per cent |
Rs.5500 + Service tax |
Nil |
|
IDBI |
10.25 per cent |
Nil |
If Balance Transfer, then 2 per cent, Otherwise Nil |
|
ING Vysya |
10.75 – 11.25 per cent |
0.5 per cent of the loan amount |
Nil |
|
DHFL |
10.15 per cent |
upto 30 Lakh – Rs. 5000 + Doc Charges + Taxes; above 30 lakh & upto 75 lakh – Rs. 10000 + Doc Charges + Taxes; above 75 lakh – Rs. 20000 + Doc Charges + Taxes |
Nil |
|
Deutsche Bank |
10.50 per cent |
12000 + Service Tax |
Nil |
|
Citibank |
10.15 – 10.20 per cent |
0.25 per cent (for salaried),0.50 per cent (for Self Employed) |
Nil |
|
Allahabad Bank |
10.25 per cent |
upto 30 lakh: 0.60 per cent of the loan amount subject to max. Rs.1200030 lakh – 75 lakh: 0.45 per cent of the loan amount subject to max. Rs.24000
above 75 lakh – 300 lakh: 0.35 per cent of the loan amount subject to max. Rs.60000 above 300 lakh: 0.25 per cent of the loan amount subject to max. Rs.70000 |
Nil |
|
India Bulls |
10.15 per cent (Upto 25 Lakh), then 11 per cent |
Rs.7500 + 12.36 per cent (Upto 30Lakh), else 0.5 per cent of the loan amount |
Nil |
|
Central Bank of India |
10.25 per cent |
0.50 per cent of the loan amount subject to maximum of Rs.20,000 |
Nil |
|
Bank of Maharashtra |
10.55 per cent (Upto 25Lakh), Then 10.75 per cent |
0.25 per cent of the loan amount (subject to maximum of Rs.25,000) |
Nil |
|
Bank of India |
10.20 per cent |
100 per cent waiver of Processing charges on new home loans sanctioned during festive period upto 31.03.2015 ] |
Nil |
|
Corporation Bank |
10.25 per cent |
0.50 per cent of Loan amount (Max.Rs.50,000) |
Nil |
|
Union Bank of India |
10.25 per cent |
N.A | Nil |
|
UCO Bank |
10.20 per cent |
0.5 per cent of the loan amount, minimum Rs.1500 & maximum Rs. 15000 |
Nil |
|
United Bank of India |
10.25 per cent |
Waiver of processing and documentation charges upto Rs.75 lakh |
N.A |
|
Bank of Baroda |
10.25 per cent |
0.25 per cent of loan amount Min.Rs.1, 000 and Max. Rs.20,000 |
N.A |
|
Oriental Bank of Commerce |
10.25 per cent |
Nil |
Nil |
|
Dena Bank |
10.25 per cent |
0.50 per cent of sanctioned limit |
Nil |
|
Kotak Bank |
10.25 per cent |
0.25 – 0.5 per cent |
2 per cent on Balance transfer, else NIL |
|
Canara Bank |
10.20 per cent |
||
|
Punjab National Bank |
10.25 per cent |
Nil |
Nil |
|
Vijaya Bank |
10.30 per cent |
0.25 per cent of loan amount. Maximum Rs.10000. Exclusive of Service Tax |
N.A |
|
First Blue Home Finance |
10.25 per cent (for Salaried/SEP), 10.75 per cent (For Self Employed) (Upto 25Lakh), Then 10.75 per cent (for Salaried/SEP), 11.25 per cent (For Self Employed) |
Salaried: Up to 30 lakh :730030 – 75 lakh : 11800
75 lakh & above : 15,000 + service tax(12.36 per cent) |
Nil |
|
Syndicate Bank |
10.25 per cent |
upto Rs.25 lakh – 0.25 per cent (Min Rs 1000 – Max Rs 5000) 26 lakh to 75 lakh – 0.55 per cent (Max.Rs.500) above Rs.75 lakh – 0.55 per cent (Max Rs.10000) |
N.A |
|
Federal Bank |
10.20 – 10.35 per cent |
0.50 per cent of the limit sanctioned with a minimum of 3,000+ST, maximum of 7,500+ST |
N.A |
|
Development Credit Bank |
11.50 per cent |
1 per cent |
Nil |
|
PNB Housing Finance |
10.15 per cent (for salaried) 10.15 – 11.15 per cent (For SEMP) |
0.5 per cent |
Nil |
|
State Bank of Travancore |
10.25-10.50 per cent |
upto Rs.25,000 – Nil; Rs.25,000 to Rs.2 lakh – Rs.500; Above Rs.2 lakh – 0.50 per cent of the loan amount maximum |
Nil |
|
Indian Bank |
10.25 per cent |
0.25 per cent of loan amount with a maximum of Rs.20,000 |
Nil |
|
Dhanalakshmi Bank |
11.50 – 11.75 per cent |
1 per cent + service tax |
N.A |
|
Tata Capital Housing Finance ltd |
10.15 – 10.60 per cent (Salaried) 10.25 – 11 per cent (SEP/SENP) |
0.5 to 1 per cent of the loan amount |
N.A |
|
Indian Overseas Bank |
10.25 per cent |
A flat rate of 0.58 per cent of the loan amount- maximum of Rs. 10,190. There is no hidden charge. This is subject to change from time to time without prior intimation. |
N.A |
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