For those who have to pay regular monthly EMIs on their home loan, any change in the Home loan rates of top banks is of huge relevance as it determines whether their EMI burden will increase or reduce in the upcoming month.
Typically, in India, Banks assess their marginal cost of lending rates (MCLR) monthly to account for variations in their financing costs and other pertinent aspects. The lenders take into account repo rates and other loan-related issues when revising the MCLR. Barring certain cases, banks cannot lend loans below the MCLR. As we are in the middle of May, let us have a look at the latest MCLR of the leading banks in May 2024.
HDFC Bank Lending Rates
HDFC Bank’s overnight MCLR stands at 8.95%. The bank’s one-month MCLR and three-month MCLR stands at 9% and 9.15% respectively. The six-month MCLR is 9.30%. The one-year MCLR has been hiked to 9.30%. The two and three-year MCLR is at 9.35%. The latest rates have become effective from May 7, 2024.
| Tenor | Lender |
| Overnight | 8.95% |
| One Month | 9% |
| Three-Month | 9.15% |
| Six-Month | 9.30% |
| One Year | 9.30% |
| Two Year | 9.35% |
| Three Year | 9.35% |
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Yes Bank Lending Rates
As per the Yes bank’s website, the lender’s overnight rate is 9.25%. The MCLR-based lending rate for one-month and three month is 9.60% and 10.20% respectively. Meanwhile, the six-month and one-year rate stands at 10.45% and 10.60% respectively. The new rates are effective from May 1, 2024.
Canara Bank Lending Rates
Canara Bank’s overnight lending rate is 8.15%. The one-month, three month, and six-month rate are 8.25%, 8.35%, and 8.70% respectively. The one-year rate is 8.90%. The two-year rate is at 9.20%. The three-year rate is 9.30%. The revised rates became effective from May 12, 2024.
PNB Lending Rates
As per the PNB website, the overnight rate of the bank is 8.25%. The 1-month MCLR based lending rate is 8.30%. The three-month rate is 8.45%. The one year rate is 8.80%. The latest rates are effective from May 1, 2024.
| MCLR Tenor | Revised Rates |
| Overnight | 8.25% |
| One Month | 8.30% |
| Three Month | 8.45% |
| Six Month | 8.65% |
| One Year | 8.80% |
| Three Years | 9.10% |
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What is MCLR and how does it Impact your EMI payment?
MCLR which stands for Marginal Cost of Funds based Lending Rate is the minimum rate at which banks offer funds to borrowers.
Banks determine their minimum interest rate by taking certain factors into consideration such as their cost of funds, operating costs, and profit margin. MCLR is used to calculate the interest rate on different types of loans, including home loans. The interest rate on a home loan is usually set at a fixed percentage above the MCLR, known as the “spread.”
When banks revise their MCLR, the interest rate on loans linked to it also changes. This indicates that there will be an increase or decrease in the EMI amount depending on the direction of the MCLR movement. Usually, a lower MCLR will lead to lower interest rates and, thus, lower EMIs for borrowers, and vice versa.
One must note that along with MCLR other factor that determines the interest rate on a home loan include the borrower’s credit score and the loan tenure.
