IDFC First Bank Home Loan Interest Rates
Since its start in 2015, IDFC FIRST Bank has taken the Indian home loan market by surprise. Unmatched features and benefits, low processing charges and no hidden clauses, IDFC FIRST home loans offer everything. IDFC FIRST Bank home loan interest rates offer the choice between the fixed and floating rates of interest starting as low as 8.85% p.a.
IDFC First Bank Home Loan Interest Rates and Charges
IDFC First Bank Home Loan involves the following Interest rates, fees and charges:
Loan Types | Salaried | Self Emp. |
---|---|---|
Home Loan | 8.85% | 8.85% |
Home Loan Balance Transfer | 8.85% | 8.85% |
Home Loan Top Up | Top Up at same ROI as BT subject to max capping of 100% of the BT loan amount | Top Up at same ROI as BT subject to max capping of 100% of the BT loan amount |
Processing fee | Up to 3% of loan amount |
Foreclosure charges |
|
Charges for EMI bounce | Rs. 400 for each bounce |
Charges for swapping repayment instrument/ copies of documents/ duplicate list of documents/ duplicate NOC or NDC/ cancellation of disbursement cheque | Rs. 500 per request |
MCLR to EBR switch fees for variable rate loans | Up to 0.5% of the outstanding loan amount |
Fees for conversion of Short & Sweet Loan to Simple Home Loan & vice versa | Up to 0.5% of the outstanding loan amount |
Re-pricing fees | Up to 2% of the outstanding loan amount |
Default interest | 2% p.m. |
Other statutory charges and mortgage creation charges | As per actual |
You can also Apply for Bank of Baroda Home Loan and check EMI, Interest rates and Eligibility Online.
Types of IDFC First Bank Home Loans
- Purchase of Ready Property
- Purchase of Under Construction Property
- Home Construction Loan
- Composite Loan
- Loan on Plot Purchase
- Home Renovation Loan
- Home Loan Balance Transfer
- Top-up on Home Loan
You can also Calculate Rs. 5 Crore Home Loan EMI and compare interest rates with Top Banks.
IDFC First Bank Home Loan Interest Comparison with Other Lenders
Below is the comparison of IDFC First Housing Loan Interest Rate with other top five lenders:
Lender | Interest Rate |
---|---|
IDFC FIRST Bank Home Loan Interest Rate | 8.85% |
SBI Bank Home Loan Interest Rate | 8.50% - 10.05% |
Kotak Home Loan Interest Rate | 8.75% |
ICICI Bank Home Loan Interest Rate | 8.75% |
PNB Housing Finance Home Loan Interest Rates | 8.50% |
HDFC Bank Home Loan Interest Rate | 8.75% |
Things to Know About IDFC First Bank Home Loan Interest
IDFC First Home Loan Interest Rate is fixed as well as the. The bank follows the MCLR structure. The bank will soon switch over to the RLLR method, as Reserve Bank of India (RBI) has urged banks to switch over to the RLLR by October 01, 2019.
Marginal Cost of Funds-based Lending Rate (MCLR)
The MCLR is in force since April 01, 2016. Before the concept of MCLR, the banks were following the Base Rate system with effect from July 01, 2010. The Base Rate system was also a market-related rate system. However, banks were slow in passing on the benefits of market fluctuations to their customers. Therefore, the concept of MCLR came into being.
MCLR comprises of the following key aspects:
- Marginal Cost of Funds: The marginal cost of funds involves the marginal cost of borrowings and the return on the net worth of the bank.
- Tenor Premium: This factor does not have any connection with the borrower type or category. It is the same irrespective of the type of borrower financed by the bank.
- Operating Cost: This aspect deals with the cost incurred by the bank in mobilising enough funds for financing. It excludes the charges that are recoverable by the bank by way of processing fees.
- CRR Negative Carry: There is a negative carry on the CRR when the returns on CRR are less than the cost of funds.
All these factors combine to decide the MCLR of the bank. Each bank has its MCLR. Usually, banks announce their MCLR monthly. However, the resetting of the MCLR linked to the loan accounts do not take place immediately. It depends on the reset frequency decided by the individual bank. If the bank goes for an annual reset, the benefit of the market rate fluctuation does not reach the ultimate beneficiary until the reset date.
In the meanwhile, the market rates can go up again as well. Therefore, RBI observed that banks were lagging in passing over the benefit to their customers. This reluctance on the part of the bank forced RBI to come up with a solution in the form of linking the interest rates to an external benchmark rate. The repo rate is one such vital rate.
Repo Rate Linked Lending Rate (RLLR)
The RLLR is a better indicator of the market rate because of its direct link with the repo rate.
RLLR comprises of only three factors:
- Repo Rate: The Reserve Bank of India announces the Repo Rates from time to time. The latest announcement envisages the reduction of repo rates from 5.90% to 6.25%.
- The Average Net Interest Margin: Banks add the average net interest margin of the last ten years to the repo rate as the interest spread. In doing so, the banks round off the net interest margin to the nearest '5 basis points'.
- The Credit Score of the Borrower: The CIBIL score or the internal credit rating of the borrower is an integral factor of RLLR. The lower the score, the more will be the spread. Therefore, borrowers with good CIBIL scores benefit from the concept of RLLR.
Points to Consider IDFC First Bank Home Loan Interest Rates
- IDFC First Bank Home Loan interest rate is linked to its MCLR-3M rate
- The spread on the Home Loan ranges up to 3.50%
The following factors decide the rate of interest on the Home Loan for the individual borrower:
- The amount of loan
- The loan tenure
- The nature of security on offer
- The credit history of the borrower
- The rates of interest for the PMAY Home Loans are the same. The only distinction is in the determination of the EMI for the Home Loan.
- You can compare IDFC First Home Loan Interest Rates Online with other lenders on MyMoneyMantra.
IDFC First Bank Home Loan Interest Calculation
IDFC First Bank calculates Home Loan interest on the daily reducing balances method. This method is the best one that offers the best benefits to the borrower. You can use IDFC First Home Loan Interest Rate Calculator available online to calculate the applicable rate.
IDFC First Bank Home Loan - PMAY Subsidy
PMAY Home Loans are unique because of the upfront subsidy factor. The Government of India releases the PMAY subsidy that is to be credited upfront to the borrower loan account. Therefore, the loan liability of the borrower decreases by the amount of grant. The calculation of EMI is done based on the reduced principal amount.
The benefits accruing to the borrower because of PMAY upfront subsidy are as follows:
- The EMI reduces considerably because of the upfront crediting of subsidy into the loan account
- The interest liability of the borrower also decreases because of the reduction in the principal loan amount.
Calculation of PMAY Subsidy
The calculation of PMAY subsidy is a complicated one:
- Take out the amortisation schedule of the Home Loan at the contracted rate of interest for the entire loan tenure.
- The loan amount eligible for a subsidy depends on the category of the borrower
- Calculate the ''Net Present Value' of the interest amount for 20 years at a notional interest rate of 9%.
- Ensure that this amount does not exceed the maximum eligible subsidy for the borrower. It depends on the category of the borrower.
Alternatively, use the PMAY subsidy calculator provided on the PMAY official website to determine the subsidy amount.
Category of borrower | EWS | LIG | MIG-I | MIG-II |
---|---|---|---|---|
Maximum annual family income | Rs. 3 Lakhs | Rs. 6 Lakhs | Rs. 12 Lakhs | Rs. 18 Lakhs |
Loan amount eligible for a subsidy | Rs.6 Lakhs | Rs. 6 Lakhs | Rs. 9 Lakhs | Rs. 12 Lakhs |
Rate of subsidy | 6.5% | 6.5% | 4% | 3% |
Maximum grant | Rs. 2.67 Lakhs | Rs. 2.67 Lakhs | 2.35 Lakhs | Rs. 2.30 Lakhs |
Check out the procedure of How to Apply for Pradhan Mantri Awas Yojana Online.
IDFC First Bank - Modes of Repayment
The ideal mode of Home Loan repayment is the EMI.
Calculation of EMI
- IDFC First Bank has an EMI Calculator on its official website. Use this calculator to determine your EMI. The borrower has to enter the loan amount, the rate of interest, and the loan repayment tenure to get the EMI instantly.
- MyMoneyMantra has a similar Home Loan EMI Calculator on its website. Browse the official site of MyMoneyMantra and select the Financial Tools option.
- Choose the EMI Calculator and enter the data requested. You get your EMI and the breakup of the principal and interest repayment for the entire loan repayment tenure.
You can also use Loan Prepayment Calculator to find out how much you will save on interest and how it affects your Loan EMI.
IDFC First Bank Home Loan Interest Rates FAQs
As on date, IDFC First Bank does not have a Home Loan product linked to the RLLR. It can have one in the future. For more IDFC FIRST Home Loan Interest Rates Details, go to the interest rates section.
No. IDFC First Home Loan Interest Rates for Women are same as they are for men.
No. The rates for salaried individuals are same as IDFC First Home Loan Interest Rates for Others.
It is comfortable for the banks to increase the tenure as compared to increasing the ECS demand every month. Banks cater to many customers. Therefore, the easy way out for the banks is to increase the tenure.
Yes, the borrower can switch to the RLLR from the MCLR and vice versa.
Housing loan is priority sector finance in India. The banks have stipulated the fixed rates at considerably high levels as compared to the floating rates. The chances of the market fluctuations crossing the fixed rate of interest are remote. Hence, it is better to opt for a floating rate of interest on your Home Loans.
This will depend on your financial situation and how you expect it to change over time. Fixed-rate home loans are best if you prefer predictable payments and plan to stay in the house for a long time. Adjustable-rate home loans can be advantageous if you expect your income to increase in the future or plan to sell the house before the rate increases.