Union Bank Joins Move to Cut Home Loan Rates

New home loans from Union Bank would be charged at a lower rate with immediate effect, depending on the size of the loan.

Floating loan rates have been pegged at 10.75%, as against 11% for home loans less than Rs.20 lakh taken for a 5 year period.

Loans taken for a period between 5 and 10 years would bear an interest
charge of 11.25% as against 11.5% charged hitherto. Loans taken for a period
of 10 to 20 years will attract an interest rate of 11.5 per cent, as against
11.75% till now.

The fixed rate on the less than Rs.20 lakh loan has not been changed
from 10.75%.
Floating Loan rates for loans above Rs. 20 lakh would be decided on
the margin of the loan.

This would translate into a discount of 25 basis
points (.25%) for a loan of 75% of the value of the property. A loan
for less than 75% of the value of the property would attract a discount
of 50 basis points, or .5%.

The prevailing floating rate is 11% for
a 5 year period, 11.5% for a 5-10 year period, and 11.75% for a 10-20
year period.