Home Loan Rates - Going North or South ?

Looks like the market has already reached the bottom in terms of home loan rates, banks have changed course and rates are on their way up. Private sector bank lenders such as Axis Bank, IndusInd Bank, Yes Bank and Kotak Mahindra Bank have increased their benchmark marginal cost of funds based lending rate (MCLR) by 5 to 10 basis points since January 2018.

The market has never been this unpredictable. Banks say this unpredictability in market, the first time ever since they moved to a new MCLR system in April 2016, is due to the higher price they are paying for deposits. Rates are likely to remain north in the short term. Certificate of deposit rates have increased by 50 bps across all tenors. This is also a major reason in the interest rate hike. RBI has also hinted at the rates not going down anytime soon.

RBI had earlier kept policy rate on hold at 6% after inflation accelerated to a 7 month high. This along with uncertainties over government borrowing has led to a rise in government bond yields. In addition, the ten year benchmark bond touched an 18 month high of 7.38% earlier this month. Short term rates are on the way up and interest rates are unpredictable as market is reacting sharply.

Let’s take a look at the current floating home loan rates of various banks in India:

  • ICICI Bank - 8.35%-8.80%
  • PNB Housing Finance - 8.40%-8.99%
  • Axis Bank - 8.40%-8.75%
  • SBI Home Loans - 8.45%-8.65%
  • Deutsche Bank - 10.50%
  • HDFC Bank - 8.50%-8.60%
  • Standard Chartered - 8.51%

BrickLoans is a FinTech company focused on only Home Loans. We make fresh loans/existing loan transfer easier for you. All you have to do is contact us and we will take care of the entire process. Founded by Ex IITians and professionals with corporate experience and pedigree. We operate in following cities Mumbai, Pune, Chennai, Gurgaon, Noida, Bangalore and Hyderabad

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