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Home loan borrowers have reasons to cheer. After some tough talking by the RBI Governor, many banks slashed their rates by 15-25 basis points with effect from April. Some non-banking finance companies (NBFCs) too followed suit. Following the move, SBI and HDFC continue to remain among the most competitive home loan providers. Both have slashed interest rates to 9.9 per cent a year, irrespective of the loan amount for new borrowers. In fact, existing customers of HDFC too will henceforth enjoy this rate of interest. SBI, on the other hand, has brought down the interest rate from 10.15 per cent to 10 per cent for its existing home loan borrowers.
Loan limits NBFCs such as Dewan Housing Finance (DHFL) and Indiabulls Housing Finance too have lowered home loan rates to 9.9 per cent for their existing and new customers. But, do take note that the new rate applies only to loans of up to a certain amount. The upper limit is ₹1.5 crore in case of DHFL and ₹50 lakh for Indiabulls Housing Finance. ICICI Bank too has an upper loan limit, though it is much higher. It will lend up to ₹5 crore to the salaried and up to ₹1.5 crore to the self-employed at this rate.
Loans beyond a certain amount will be charged a higher rate of interest. For instance, a loan of over ₹50 lakh and up to ₹100 lakh from Indiabulls Housing Finance will attract an interest rate of 10 per cent.
Others such as Axis Bank and Sundaram BNP Paribas Home Finance too have cut interest rates, but by a slightly smaller fraction, to 9.95 per cent. Tata Capital and PNB Housing too have joined this bandwagon.
But when it comes to the most attractive home loan rates on offer, it is the women borrowers who get the best deal. SBI and ICICI Bank have further slashed the concessional rates charged to women borrowers to 9.85 per cent. HDFC too has now launched a concessional loan product for women at 9.85 per cent interest rate.
So, how much do you stand to gain from the recent rate cuts? Assume you want to take a ₹15-lakh home loan that has to be repaid over a 20-year period. Your EMI (equated monthly instalment) would now be ₹14,376, assuming a rate of 9.9 per cent per annum.
Prior to the rate cuts, the EMI on the same loan, assuming the then cheapest interest rate of 10.15 per cent, would have worked out to ₹14,625.
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