Bank of Baroda cuts home loan rate by 25 bps to 6.5% till June end

The move runs contra to the 5 bps hike in MCLR; the special rate is available across all loans amounts and is linked to borrower's credit profile

Public sector lender Bank of Baroda (BOB) has cut the lending rate for home loan by 25 basis points to 6.5 per cent till end of June 2022 to push retail credit. This special rate is available across all loans amounts and is linked to a borrower’s credit profile.

The new rate beginning at 6.50 per cent per annum is available for fresh home loans as well as for balance transfers, BOB said in a statement. Bank of Baroda Home Loans are linked to an external benchmark - policy repo rate set by Reserve Bank of India.

This rate cut contrasts with lender decision to hike Marginal Cost of Funds Based Lending Rate (MCLR) by five basis points across different maturities from April 12, 2022 for increase in cost of funds. One year MCLR would be 7.35 per cent, up from 7.30 per cent.

Further, the Bank has also announced a 100 per cent waiver on processing fees during this period.

H T Solanki, General Manager - Mortgages & Other Retail Assets, BOB said, there has seen a significant pick-up in home sales over the last many months and expect the momentum to continue.

It's home loans portfolio rose by 6.57 per cent to year on year basis to Rs 76,898 crore by end of December 2021. Total retail loan portfolio was up 11.13 per cent to Rs 1,28,960 crore as of December 2021.