Does Canara Bank Home Loan Interest Rate Intrigue You?

Does Canara Bank Home Loan Interest Rate Intrigue You?

Canara Bank is a renowned public sector bank offering a wide range of lending products such as a home loan. The loan is available to people having the salary as well as business income.

As the loan typically runs a long journey of around 20-30 years, you must be aware of the interest rate that Canara Bank would charge. After all, it’s Canara Bank Home Loan Interest Rate that will mostly set the tone of your repayment. Any slippage on this front can make you pay big time. So, if you are looking to apply for a home loan from this public sector bank, you should not only know the interest rate it charges but also the possible impact of the same. The article is thus here to guide you to home glory by virtue of loan from Canara Bank.

What is Canara Bank Home Loan Interest Rate?

Canara Bank Home Loan Interest Rates range from 8.60%-8.85% per annum. But it won’t be the same throughout the course of a loan as the rate will change in accordance with the cost of fund situation prevailing at Canara Bank. The bank uses the benchmark MCLR to price home loans. The Marginal Cost of Lending Rate (MCLR) of the bank stands at 8.60%. The MCLR further adds a portion of spread to become the eventual lending rate. The movement in MCLR will impact the interest rate from time to time. However, the rate won’t change every time the new MCLR is announced. The rate will change as per the prevailing MCLR on the date of reset. Normally, the reset period of Canara Bank Home Loan is a year from the date of sanction. The same methodology would continue over the years leading up to the expiry of the loan.

Salaried Have a Considerable Advantage Over Business Class As the talk of spread is mentioned above, you, if salaried, would be delighted to know that Canara Bank won’t charge any markup over the MCLR. Doesn’t matter how much loan you apply for, the interest rate will be at the MCLR without any addition of spread. In the current scenario, the rate of interest will be 8.60% per annum. People other than salaried would have interest rates inclusive of spread. Loans up to ₹30 lakh would be available to women borrowers at 8.65% and 8.70% to male borrowers. On the other hand, loans above ₹30-75 lakh come at an interest rate of 8.75% and 8.80% for women and male, respectively.

Loans above 75 lakh are available at 8.75% and 8.80% to female and male borrowers, respectively.

How Can You Check the Effect of Canara Bank Home Loan Interest Rate?

You can use the Canara Bank Home Loan EMI Calculator to check the effect of rates. More the rate of interest greater will be the EMI & interest outgo and vice-versa. The EMI, which stands for Equated Monthly Installment, combines interest and principal to be paid over the course of a loan. The calculator, however, requires two more elements – loan amount and tenure – to compute the repayment estimates.

Effect of Interest Rate Will Also be Seen on the Amortization Schedule Upon using the EMI calculator, you can also get to see an amortization schedule showing the repayment of principal and interest on a monthly or yearly basis. The home loan will see the interest portion of the EMI accounting more than the principal in the first half of the loan. The second half will see the principal getting deducted more than the interest. In addition, you can even see the outstanding loan balance at the end of every year.