Your Emi May Rise As Multiple Lenders Raise Home Loan Interest Rates

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By Anshul IST (Released)

Lenders raised interest rates on home loans following the Reserve Bank of India’s (RBI) benchmark rate hike. Read the details here

Several banks raised their reverse repo lending rate (RLLR) and their marginal cost of funds lending rate (MCLR). As a result, monthly equivalent payments (EMI) will become expensive for those who benefit from home loans compared to RLLR and MCLR.

The moves come after the Reserve Bank of India (RBI) hiked the repo rate by 50 basis points in its Monetary Policy Committee (MPC).

Typically, when RBI raises the repo rate, it increases the cost of funds for banks. This means banks will have to pay more for the money they borrow from RBI. Therefore, banks pass the cost on to borrowers by raising the interest rates on their loans, making EMIs more expensive.

As a result, new and existing borrowers are witnessing an increase in interest rates on their loans.

Here is a list of banks that have recently revised mortgage rates:

HDFC Bank has increased its lending rate based on the marginal cost of funds-based lending rate (MCLR). According to the HDFC Bank website, as of November 7, 2022, the overnight MCLR is now 8.20% from 7.90% previously. The MCLR for one month is 8.25% versus 7.90%.

Canara Bank

The lender revised its reverse repo lending rate (RLLR) and increased its marginal cost of funds (MCLR) lending rate.

The bank increased the MCLR by 20 basis points on all mandates. Canara Bank raised rates on the overnight and one-month MCLR from 7.05% to 7.25%.

Bank of Maharashtra

Bank of Maharashtra said it has increased its MCLR for certain term loans. The benchmark one-year MCLR, used to price most consumer loans such as auto, personal and home loans, was revised up to 7.90% from 7.80%.

The one-month MCLR was raised by 5 basis points to 7.50%.

DCB Bank

DCB Bank revised the MCLR upwards by 27 basis points across all durations. The benchmark one-year MCLR rate is set at 10.23%.

The one-, three-, and six-month MCLRs were revised to 9.63%, 9.79%, and 10.02%, respectively.

Banks Starting interest rate (pa) Processing fee
Kotak Mahindra Bank 7.50% per year 0.50%
Citibank from 6.65% per year Rs. 10,000
Union Bank of India from 8.25% per year
Bank of Baroda 7.45% per year and more
central bank of india 7.20% per year to 7.65% per year Rs. 20,000
Bank of India 7.30% per year
National Bank of India from 8.55% per year 0.35% and more
HDFC Home Loans from 8.60% per year* 0.5% or Rs 3,000, whichever is greater
LIC Housing Finance from 7.55% per year Rs. 10,000 -Rs. 15,000

(Source: Bankbazaar)

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