Home loan interest rates, for a good three years in succession, kept falling around and enticed many to apply for the debt who before were taking all the pains of a rental accommodation. The Reserve Bank of India (RBI) started a monetary easing stance in 2015 that continued for around 2 years, giving banks the room to cut rates on a home loan. What also aided was the introduction of a more responsive loan pricing benchmark in the form of marginal cost of lending rate (MCLR), and the demonetization of higher denomination notes that increased the deposit volumes of banks.
These developments enabled lenders to pass on the benefits to the customers through lower interest rates on a home loan, even when the RBI maintained a status quo on the policy rates. But now, it seems the tide is turning the other way round with lenders such as HDFC Bank, Axis Bank, Kotak Mahindra Bank and a few others raising the lending rates in the recent past. In lieu of such a happening, it won’t be a surprise to hear the times of lowest home loan rates would soon vanish.
Why Are Home Loan Rates Rising?
Bond yields have grown by above a percentage point in the last few months. Due to which, it has become expensive for banks to issue certificates of deposit (CD). Plus, the market borrowing costs are getting increasingly higher, nudging even top corporates to approach banks. This increases the scope for a hike in interest rates. Banks like SBI have hiked the bulk deposit rates. The public lender has increased the interest rates on one-year deposits of more than 1 crore by 200 basis points to 6.25%, which makes it tough for the lender to ease the rates further.
List of Lenders Offering Home Loans at Lowest Rates
There are a handful of lenders that offer home loans at attractive interest rates. Let’s check out some of them.
Home Loan Interest Rates SBI
SBI offers home loans to both salaried and non-salaried class, with its interest rates varying according to the gender and the amount of finance. For loans up to ₹30 lakhs, salaried borrowers can get an interest rate deal of 8.30%-8.35% per annum. While those other than salaried must be ready to service the debt at 8.40%-8.45% p.a. Loans from ₹30-75 lakhs would come at 8.30%-8.40% and 8.45%-8.55% for salaried and non-salaried, respectively. Loans above ₹75 lakhs bear an interest rate of 8.40%-8.50% and 8.50%-8.60% for salaried and non-salaried, respectively.
Home Loan Interest Rates HDFC
HDFC, a seriously strong competitor to SBI, offers home loans at 8.35%-8.95% per annum. Although its rates may be more than SBI, its extensive branch and dedicated wing of home loan make customers go gaga over it.
Housing Loan Interest Calculator
The discussion on interest rates often leads to calculating the likely installments on a home loan that runs for as long as 20-30 years. So, what is that device you should look to calculate the installments? The name of the device is interest calculator or home loan EMI calculator, which is there online for use. Your job is just to enter the amount of loan, the rate of interest and tenure to calculate the EMI, which stands for Equated Monthly Installments. You can even know the amount of interest that’s gonna be the case with you over the years.
So, the article has thrown interesting points regarding home loan interest rates of banks, as well as highlighted the reasons for their consistent rise.