Several banks have raised their Repo Linked Lending Rate (RLLR) and Marginal Cost of Funds Based Lending Rate (MCLR). As a result, the equated monthly installments (EMIs) will get expensive for those who avail home loans benchmarked against RLLR and MCLR
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These moves come after Reserve Bank of India (RBI) hiked the repo rate by 50 basis points in its Monetary Policy Committee (MPC).
Generally, when RBI hikes the repo rate, it increases the cost of funds for banks. This means that banks will have to pay more for the money they borrow from RBI. Consequently, banks pass on the cost to borrowers by increasing their loan interest rates, making EMIs costlier.
As a result, both new and existing borrowers witness an increase in their loan interest rates.
Here's a list of banks that have recently revised home loan rates:
HDFC Bank
HDFC Bank has hiked its lending rate depending on marginal cost of funds-based lending rate (MCLR). According to the HDFC Bank website, effective from November 7, 2022, the overnight MCLR is now 8.20 percent from earlier 7.90 percent. The MCLR for one month is 8.25 percent up from 7.90 percent.
Canara Bank
The lender has revised its Repo Linked Lending Rate (RLLR) and hiked its Marginal Cost of Funds Based Lending Rate (MCLR).
The bank has hiked MCLR by 20 basis points on all tenures. Canara Bank increased rates on overnight and one-month MCLR from 7.05 percent to 7.25 percent.
Bank of Maharashtra
Bank of Maharashtra said it has increased its MCLR for select tenor loans. The benchmark one-year MCLR, used to price most of consumer loans such as auto, personal and home, has been revised upwards to 7.90 percent from 7.80 percent.
The one-month MCLR has been raised by 5 basis points to 7.50 per cent.
DCB Bank
DCB Bank has revised upwards MCLR by 27 basis points across tenors. The benchmark one-year MCLR rate is priced at 10.23 percent.
The one, three and six-month tenor MCLRs have been revised to 9.63 percent, 9.79 percent and 10.02 percent, respectively.
| Banks | Starting Interest Rate (p.a.) | Processing Fees |
| Kotak Mahindra Bank | 7.50% p.a. onwards | 0.50% |
| Citibank | 6.65% p.a. onwards | Rs. 10,000 |
| Union Bank of India | 8.25% p.a. onwards | - |
| Bank of Baroda | 7.45% p.a. onwards | |
| Central Bank of India | 7.20% p.a. to 7.65% p.a. | Rs. 20,000 |
| Bank of India | 7.30% p.a. onwards | - |
| State Bank of India | 8.55% p.a. onwards | 0.35% onwards |
| HDFC Home Loans | 8.60% p.a. onwards* | 0.5% or Rs.3,000 whichever is higher |
| LIC Housing Finance | 7.55% p.a. onwards | Rs. 10,000 -Rs. 15,000 |
(Source: Bankbazaar)
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