The Reserve Bank of India (RBI) has hiked the repo rate by 90 bps since May 2022. Many banks including have increased their home loan interest rates du to this.
According to the ICICI Bank website, “RBI policy repo rate effective June 8, 2022, is 4.90 percent. ICICI Bank External Benchmark Lending Rate (I-EBLR) is referenced to RBI policy repo rate with a mark-up over repo rate. I-EBLR is 8.60 per cent p.a.p.m. effective June 8, 2022.”
What is a credit score?
According to the ICICI Bank website, “There are now credit bureaus like CIBIL that maintain the credit history of people. Based on how you have dealt with Loans and Credit Cards in the past, these credit bureaus calculate a 3-digit score. This score helps lenders know whether or not you are a creditworthy individual.”
The banks add margin to the interest rate depending on your Cibil score and other factors like profile, segments, etc.
What is the latest ICICI Bank home loan interest rate
ICICI Bank offers floating interest along with repo rate and risk premium which will vary depending on the CIBIL score. For home loans up to Rs 35 lakhs, RR + 2.70% (7.60%) to RR + 3.15% (8.05%). Interest rate varies between 7.60 percent to 8.05 percent, plus repo rate and risk premium is added between 2.70 percent to 3.15 percent for salaried borrowers.
For home loans ranging from Rs 35 lakhs to Rs 75 lakhs, interest rate varies between 7.60 to 8.20 percent and risk premium varies between 2.70 to 3.30 percent for salaried borrowers.
For home loans above Rs 75 lakhs, interest rate varies between 7.60 to 8.30 percent and risk premium varies between 2.70 to 3.40 percent for salaried borrowers.
ICICI Bank MCLR on loans
In early July 2022, ICICI Bank increased its marginal cost based lending rate (MCLR) by 20 basis points across all tenures. (0.01 percent is equal to one basis point.) The higher interest rates are effective from July 1, 2022.
According to the ICICI Bank website, the overnight MCLR rate has been increased to 7.50 percent from 7.30 percent. The one-month, and three-month MCLRs at ICICI Bank have been increased to 7.50 percent, and 7.55 percent, respectively.
Important FAQs as per the ICICI Bank website
1. How do you reduce the Home Loan interest rate?
The Home Loan interest rate can be reduced by doing a Balance Transfer to the new lender offering a lower rate of interest as compared to the existing lender. One can also approach an existing financier to lower the rate of interest.
2. How is the Home Loan EMI calculated?
The Home Loan EMI is calculated basis the loan amount required, the loan tenure and the rate of interest applicable.
3.What is a Floating rate Home Loan?
A Floating rate Home Loan is where the rate of interest is linked to the benchmark rate and the rate of interest changes with the change in the benchmark rate.
4. What is a Fixed rate Home Loan?
A Fixed rate Home Loan is where the rate of interest is fixed for a specific tenure and the rate of interest does not change with the benchmark rate movements.