Canara Bank revises home loan interest rates; EMIs to increase

Canara Bank has revised its Repo Linked Lending Rate (RLLR) and hiked its Marginal Cost of Funds Based Lending Rate (MCLR). According to the bank's official website, the higher interest rates are effective from November 7, 2022.

This increase is bad news for current borrowers because banks and other financial organisations will raise loan interest rates when on the reset dates, which would increase EMI amounts accordingly.

Canara Bank MCLR

The bank has hiked MCLR by 20 basis points on all tenures. Canara Bank increased rates on overnight and one-month MCLR from 7.05% to 7.25%. The three-month MCLR has been increased to 7.55%, while the six-month MCLR has been increased to 8% from 7.80%. The bank increased the one-year MCLR to 8.10%.

Canara Bank RLLR
According to the Canara Bank website, “RLLR OF THE BANK – 8.80 % w.e.f 07.11.2022.”

Housing loan
The bank is offering a concession for low risk borrowers where new housing loans (all variants) are sanctioned and disbursed during the period, i.e., from October 1, 2022 to December 31, 2022, according to the Canara Bank website.

Here are important FAQs on home loans, according to the HDFC website.

1. What is a balance transfer loan ?
Transferring your outstanding home loan availed from another Bank / Financial Institution to another is known as a balance transfer loan.

2. What is a Top Up loan?
Top Up Loans can be availed for personal and professional needs(other than for speculative purposes) like marriage, Child's education, business expansion, debt consolidation etc.

3. What is a pre-EMI on a home loan?
Pre-EMI is the monthly payment of interest on your home loan. This amount is paid during the period till the full disbursement of the loan. Your actual loan tenure — and EMI (comprising of both principal and interest) payments — begins once the Pre-EMI phase is over i.e. post the house loan has been fully disbursed.

4. Do I get tax benefits on my housing loan?
Yes. You may be eligible for tax benefits on repayment of the principal and interest components of your Home Loan as per sections 80C, 24(b) and 80EEA of the Income Tax Act, 1961. Since the benefits may vary each year, please do consult your chartered accountant/ tax expert for the latest information.