Union Bank of India hikes home loan, other loan interest rates

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Union Bank of India has increased its marginal costs of funds-based lending rates (MCLR) across all tenures. According to the bank’s website, the revised interest rates will be effective between January 11, 2023 and 10th February 2023.After the hike, the Union Bank of India’s overnight MCLR rate has increased to 7.65 percent, while its one-, three-, and six-month rates have changed to 7.80 percent, 8.00 percent, and 8.20 percent, respectively. Three-year MCLR is 8.75 percent, two-year MCLR is 8.60 percent, and one-year MCLR is 8.40percent.

TypesProposed MCLR
Overnight MCLR7.65%
1 month MCLR7.80%
3 Months MCLR8.00%
6 Months MCLR8.20%
1 year MCLR8.40%
2 year MCLR8.60%
3 year MCLR8.75%

Union Bank of India’s base rate is at 9.25% with effect from January 1, 2023.

Impact will differ
Current home loan borrowers as well as future home loan borrowers who plan to apply for loans shortly will be impacted by the increase in rates. But note that depending on how much their mortgages are still owed, the effect on present homeowners will differ.
Home loan rates for salaried and non-salaried men and women with credit scores of 800 and higher are EBLR – 0.45% = 8.60% for amounts up to Rs 30 lakh. While the rate for credit scores between 750 and 799 is EBLR – 0.35% = 8.70%.

Other banks

HDFC Bank hiked MCLR by up to 25 basis points, ICICI Bank has raised its marginal cost-based lending rate (MCLR) across all tenures by up to 25 basis points. Bank of India has hiked the marginal cost of funds based lending rate (MCLR) by up to 15 bps across MCLR tenures. Bank of Baroda to raise its marginal cost of funds-based lending rate (MCLR) by up to 35 basis points across all tenures.Banks including Punjab National Bank, Canara Bank, and Union Bank of India have increased the interest rates on house loans that are based on the repo rate.

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