The third-largest public run bank, Bank of Baroda follows in the footsteps of SBI with home loan rate slashed to 8.3%. Earlier SBI slashed rates on home and auto loan to 8.3% and 8.7% respectively in the week gone by. The bank reduced its 1-year MCLR by 5 basis points or 0.05% to 8%.
In a statement, the bank said that the MCLR or marginal cost of funds based lending rate for 1 year for the bank is 8.3% and is applicable to all borrowers irrespective of the home loan amount and borrower category i.e self employed or salaried. The loan is available for a maximum period of upto 30 years.
The bank statement further added, "The lowest rate of interest currently offered by the other public sector banks, is applicable only to a small category of customers, such as the salaried woman seeking a loan of less than Rs 30 lakh. However, a male entrepreneur with pristine credit rating seeking a home loan of more than Rs 75 lakh may end up paying a rate of interest of 8.50 percent and above at other banks."
With a flush of cash deposits post demonetisation, BOB earlier reduced MCLR on January 1, 2017. This is the second cut this year in MCLR rate which has been effected after a 10 months gap. MCLR is the minimum rate below which banks are not allowed to lend to borrowers.
Other banks and housing finance companies including ICICI Bank, Axis Bank, LIC Housing Finance, HDFC Ltd. are offering home loans @ 8.35%.