State-run Union Bank of India on October 26, 2021, announced it has brought down its home loan interest rate to 6.40% from 6.80% after implementing a 40 basis point (bps) cut. This is the lowest home loan interest rate offered by any bank in the country at present.
The move that is likely to escalate an ongoing price war among banks in India that are currently wooing customers with competitive rates to cash in on the festive season 2021. Unlike most banks, where the reduction in home loan rates is application only till the festive season ending on December 31, 2021, the rate cut by Union Bank is not limited to the festive period, the bank said in an official statement.
“Customers will be benefited from this offering during the festive season as we see a rising demand for buying homes. With this reduced rate of interest, Union Bank of India’s Home Loan rate is the most competitive in the industry,” it said.
The reduction in rates from the Union Bank of India comes into effect from October 27, 2021. However, the new rates at Union Bank will be applicable only on fresh home loans or balance transfer cases.
Nearly all banks in the country have announced reduction in their interest recently to boost the festive spirit by offering cheaper home loan. Aside from cutting interest rates most of these banks have also waived off processing charge on home loan applications to further sweeten the deal for home loan borrowers.
Before the cut by Union Bank, Kotak Mahindra Bank and Bank of India were offering the cheapest home loans, at 6.50% annual interest. Bank of India announced the cut in its home loan rates only on October 17, 2021.
Cheapest home loans right now
|Lender||Interest rate (in percentage)|
|Bank of India||6.85-7.85|
|Central Bank of India||6.85-9.05|
|Punjab and Sind Bank||6.90- 7.25|
|Canara Bank||6.90- 8.90|
|Bank of Baroda||7-8.50|
|Bank of India||7-8|
|Private lender||Interest rate (in percentage)|