Bank of Baroda offers home loan rates at 8.35%, cheaper than SBI rates

Mumbai: State-owned lender Bank of Baroda said on Monday that it will offer home loans at an interest rate of 8.35%, the lowest in the industry.

“For customers with a credit score of 760 or above, we are offering home loans at this rate. For others, the rate can go up to 9.35%,” said Baburaj N.R., chief manager, retail, Bank of Baroda.

The new rates will be applicable from 7 January.

The bank’s one-year marginal cost-based lending rate (MCLR) was reduced to 8.35% last week, on which it charges a premium of 100 basis points (bps) for home loans usually.

In case of existing home loan borrowers, Bank of Baroda will allow those who are still on the base rate mechanism of calculating interest rates to convert to an MCLR-based rate free of cost.

Similarly, the rate of interest on car loans and mortgage loans by the bank also starts at 8.85% and 10.35% respectively with reduction of MCLR rates with effect from 7 January.

Last week, after cutting its MCLR by a steep 90 bps, India’s largest lender State Bank of India (SBI) said it will offer home loans up to Rs30 lakh at 8.5% for women borrowers and 8.55% for other borrowers. In case of loans between Rs30-75 lakh, the bank said it will charge an interest rate of 8.55% from women borrowers and 8.6% from others.

On the same day, ICICI Bank said it will offer home loans up to Rs75 lakh at 8.65% for women borrowers and at 8.7% for others. This was followed by Housing Development Finance Corp. (HDFC) Ltd, Indiabulls Housing Finance Ltd and Dewan Housing Finance Ltd, reducing their interest rates to pass on the benefit of reduction in cost of funds to customers.