External loans indexed to benchmarks are easier to understand and ensure that changes in policy rates are transmitted transparently
Compared to banks, the documentation is simpler and the turnaround time is also much faster in HFCs
With external loans linked to benchmarks, banks have no choice but to pass the benefits of lower repo rates on to borrowers.
New Delhi: Ahead of the holiday season, India’s largest bank SBI announced a festival deal for new home loans as well as balance transfer borrowers. Borrowers with a high credit rating will now benefit from an interest rate of 6.7% regardless of the loan amount. The lender waived the processing fee as well as the premium on interest charged to non-employee borrowers.
The nation’s largest mortgage lender, HDFC, also announced a festive credit score-linked home loan offer, with interest rates starting at 6.7%. Yet many borrowers continue to be tied to their old loans which are tied to the base rate or marginal cost of funds-based lending rates (MCLR), unlike new rates which are tied to an external benchmark, which is the RBI repo rate for most banks. .
These banks and housing finance companies (HFCs) offer the lowest interest rates on home loans:
Loan amount (Rs)
Kotak Mahindra Bank
Bank of Punjab and Sindh
National Bank of India
National Bank of Punjab
LIC Housing Finance: The home loan at LIC Housing Finance starts at an interest rate of 6.66 percent per annum. If the mortgage applicant is an employee and has a CIBIL score greater than 700, he can benefit from a mortgage at an interest rate of 6.66% per year. For self-employed and non-professionals with over 700 CIBIL score, the interest rate for a home loan up to Rs 50 lakh can be 7.00 percent.
It should be noted that Kotak Mahindra Bank has been offering the cheapest rate in the private sector bank mortgage lending industry since November of last year.
For a home loan of Rs 50 lakh to Rs 1 crore, a salaried individual with over 700 CIBIL points will be charged an interest rate of 6.90 percent on the home loan. The same for the self-employed and non-professionals will be 7.00 percent.
HDFC: The interest rate for HDFC home loans starts at 6.75 percent per year. For applicants with a credit score above 800, the interest rate is 6.7%. For female applicants, the company offers a home loan of up to Rs 30 lakh at an interest rate of 6.75 percent per annum to 7.25 percent per annum. For applicants in general, the interest rate for home loan up to Rs 30 lakh is available from 6.80 percent to 7.30 percent per annum.
For a home loan of Rs 30 lakh to Rs 75 lakh, women can get 7.00% to 7.50% per annum. For others, the applicable interest rate is 7.05% to 7.55% per annum.
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