BOI Home Loan Interest Rates: Bank of India hikes home loan interest rates

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The Reserve (RBI) raised the repo rate by 50 basis points to 5.40 percent on Friday during its MPC meeting. Following this, many banks hiked their lending rates with immediate effect, including , , and Bank of India. This indicates that the interest rates on home loans and other associated loans would increase for many borrowers.

Bank of India hiked RBLR (Repo Based Lending Rate), with effect from August 5, 2022, to 8.25 percent as per the revised repo rate (5.40%). Earlier, Bank of India RBLR was 7.75 percent.

According to the Bank of India website, “The effective RBLR w.e.f from 05/08/2022 is 8.25% as per the revised Repo rate (5.40%).”

Impact of RLLR on loans

Any change in the repo rate has an impact on the banks’ lending rates because banks borrow money from the RBI at the repo rate.

As a result, if a person chooses an RLLR house loan, his interest rates will rise or fall in accordance with fluctuations in the repo rate.

Bank of India MCLR

With effect from August 1, 2022, Bank of India increased its marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps). The EMI payments for debtors servicing loans under the MCLR regime would increase as a result of this adjustment.

The change increased the one-year MCLR from 7.50 to 7.60 percent. The overnight, one-month, and three-month MCLRs have been raised by 10 basis points, bringing them to 6. The six-month and 3-year MCLR has been raised to 7.45 and 7.80 percent, respectively.

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