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Home loan rates revised: Axis Bank, LIC Housing Finance, Bajaj Housing Finance hike rates

Home loan rates revised: Axis Bank, LIC Housing Finance, Bajaj Housing Finance hike rates

Most lenders have increased lending rates after the Reserve Bank of India (RBI) tweaked its repo rate by to 50 bps earlier in August in a bid to tackle inflation.

Basudha Das
Basudha Das
  • Updated Aug 23, 2022 6:04 PM IST
Home loan rates revised: Axis Bank, LIC Housing Finance, Bajaj Housing Finance hike ratesThe hike in repo rate has changed the equated monthly installments (EMIs) or the tenure on the home loans

Private lenders, such as Axis Bank, LIC Housing Finance, Bajaj Housing Finance, have announced a hike in their lending rates. While Axis Bank has hiked its marginal cost of lending rate (MCLR) last week, Bajaj Housing and LIC increased their Prime Lending Rate (PLR) by 50 basis points (bps), which are effective from August 22. Most lenders have increased lending rates after the Reserve Bank of India (RBI) tweaked its repo rate by to 50 bps earlier in August in a bid to tackle inflation. In the last three months, RBI has hiked the repo rate by 140 basis points – in May by 40 bps, 50 bps in July, and 50 bps in August. This has pushed the home loan rates across all banks, as with the rate hike, banks tend to pass on their burden to the investors to maintain the balance.  

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1. Axis Bank 
Private sector lender Axis Bank hiked its MCLR last week by 5 bps, which would make interest on all loans expensive. The rates are already effective from August 18. According to a notification issued by the bank, the MCLR rate for one month is now 7.85 per cent; for three months, it is 7.95 per cent; 8 per cent for six months.  

The current home loan rate for Axis Bank ranges between 8.10 per cent and 8.45 per cent per annum for salaried individuals. The maximum tenure is 30 years. The interest rate for women is 8.10 per cent. The interest rate is a bit higher for self-employed individuals and ranges between 8.20 per cent and 8.55 per cent. As per the bank’s notification, the interest rate for individuals would depend on their credit score and the product they choose.  

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Interest Rates on Home Loans

For Salaried Individuals  

Type Repo Rate + Spread Effective Rate of Interest
Floating Rate  Repo Rate + 2.70% to Repo Rate + 3.05% 8.10% - 8.45% p.a.
Fixed Rate  All Loan Amounts  14% p.a.

For self-employed individuals 

Type Repo Rate + Spread Effective Rate of Interest
Floating Rate  Repo Rate + 2.80% to Repo Rate + 3.15% 8.20% - 8.55% p.a. 
Fixed Rate  All Loan Amounts  14% p.a.

2. LIC Housing Finance 

The mortgage lender has hiked its prime lending rate by 50 bps, the rates will now start from 8 per cent. Till last week, it was 7.50 per cent. For LIC Housing Finance, the LIC Housing Prime Lending Rate (LHPLR) is the benchmark rate, and all the rates on home loans are linked to it.  The new rates are effective from August 22, 2022. The loan rate mainly depends on the CIBIL score and the type of product investors opt for.  

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Also read: How the RBI’s Moves to Control Inflation is Sending Home Loan EMIs North

For a CIBIL score of 700 or above, the interest rate on an amount up to Rs 50 lakh will be 8.05 per cent for salaried individuals and professionals. In the same CIBIL score bracket, the interest rate is 8.25 per cent for home loans up from Rs 50 lakh to Rs 2 crore. The interest rate for an amount of Rs 2 crore to Rs 15 crore is 8.40 per cent.

For those with a CIBIL score of 600-699, the interest rate for an amount up to Rs 50 lakh will be 8.30 per cent, for an amount between Rs. 50 lakh and up to Rs. 2 crore, the interest rate is 8.50%, whereas for an amount between Rs. 2 crore and Rs. 15 crore, the interest rate is 8.65%. 

For the investors who have a CIBIL score below 600, the interest rate ranges from 8.75 per cent to 9.15 per cent depending on the tenure. The rates are a bit higher for self-employed individuals and ranges between 8.15 per cent and 9.25 per cent. 

The maximum repayment period for the salaried class has been fixed to 30 years, whereas for the self-employed it is 25 years. As per LIC Housing Finance’s official website, the revised interest rates are floating and linked to LHPLR, which currently stands at 15.80 per cent. 

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Salaried and professional occupations:

CIBIL score Amount Interest rate
Score > 700  Up to Rs. 50 lakh 8.05%
  More than Rs. 50 lakh and up to Rs. 2 crore 8.25%
  Between Rs. 2 crore and Rs. 15 crore 8.40%
Score of 600-699 Up to Rs. 50 lakh 8.30%
  More than Rs. 50 lakh and up to Rs. 2 crore 8.50%
  Between Rs. 2 crore and Rs. 15 crore 8.65%
Score less than 600 Up to Rs. 50 lakh - 8.75%
  More than Rs. 50 lakh and up to Rs. 2 crore 8.95%
  Between Rs. 2 crore and Rs. 15 crore 9.15%

Self-employed individuals

CIBIL score Amount Interest rate
Score > 700  Up to Rs. 50 lakh 8.15%
  More than Rs. 50 lakh and up to Rs. 2 crore 8.35%
  Between Rs. 2 crore and Rs. 15 crore 8.50%
Score of 600-699 Up to Rs. 50 lakh 8.40%
  More than Rs. 50 lakh and up to Rs. 2 crore 8.60%
  Between Rs. 2 crore and Rs. 15 crore 8.75%
Score less than 600 Up to Rs. 50 lakh - 8.85%
  More than Rs. 50 lakh and up to Rs. 2 crore 9.05%
  Between Rs. 2 crore and Rs. 15 crore 9.25%

3. Bajaj Housing Finance 
Bajaj Housing Finance too has hiked its interest rate by 50 bps. The lowest rate of interest now starts from 7.70 per cent for salaried individuals. For self-employed applicants, the interest rates start at 7.95 per cent based on floating rates. 

Loan type Home loan 
Interest rate type  Floating 
Salaried individuals  7.70%-14.00% 
Self-employed 7.95%-14.00% 

 

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Published on: Aug 23, 2022 4:53 PM IST
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