10 Jun , 2022 By : Divye Saini
Home loan borrowers must keenly watch their home loan equated monthly installments (EMI) as home loan interest rates are on the rise after the Reserve bank of India hiked the repo rate by 50 basis points to 4.90 percent. This is the second time the central bank has raised key rates since May 2022
Now borrowers will have to prepare for continuous interest rate hikes on their loans after enjoying decadal low-interest rate.
5 banks offering lowest home loan interest
BANK NAME RLLR Minimum Interest rate (%) Maximum Interest rate
Bank of Baroda 6.9% 6.9% 8.25%
Bank of India 7.25% 6.9% 8.6%
Bank of Maharashtra 7.2% 6.8% 8.2%
Punjab & Sind Bank 6.6% 6.9% 7.75%
Union Bank of India 7.2% 6.9% 8.6%
Interest rates as on June 9, 2022
The total rise in the repo rate after the current boost is 0.9 percent. Because of the central bank's rate hikes, lenders such as banks and housing finance businesses will raise their lending rates in response, which means your EMIs will rise as well. Your EMI will increase by Rs. 1,648 from Rs. 23,259 to Rs .24,907. If you have a home loan with a balance of Rs 30 lakh and a balance tenure of 20 years at 7% pa interest, your EMI would increase by Rs.1,648 from Rs. 23,259 to Rs 24,907. You may have to pay an extra Rs 55 in EMI for every lakh rupee borrowed.
Most lenders offer housing loans ranging from 75 to 90 percent of the cost of the property, depending on the loan amount, as defined by the regulator. Depending on your house loan eligibility, if the property is evaluated at Rs 50 lakh by the lender, you can get a maximum loan of Rs 40 lakh (80% of the property cost for a loan amount up to Rs 75 lakh).
Pre-EMI is a term that refers to a loan that is being taken out on a property that is still being built. In this instance, your loan is disbursed in stages dependent on the quantity of instalment payments you must make to the developer. According to
HDFC
, “You are generally required to start paying only the interest on the loan amount disbursed (called the pre-EMI interest). In case you wish to start principal repayment immediately, you may opt to tranche the loan and start paying EMIs on the cumulative amounts disbursed.”
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