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About Bank of Maharashtra

Bank of Maharashtra was registered as a banking company on September 16, 1935. The bank opened its first branch at Pune in February 1936. Bank of Maharashtra was an entity with a regional presence until 1946 when it ventured out of the Marathi speaking provinces to Hubli. Subsequently, the bank began expanding to other areas in India. Bank of Maharashtra was among the first 14 banks to be nationalised on July 19, 1969. The turn of the century saw the bank adopting full computerisation. By 2010, all its branches were under CBS. Today, the bank has nearly 2000 offices situated in all the states and union territories in India. Bank of Maharashtra has a strong presence in the western region of our country.

Bank of Maharashtra Home Loan

Bank of Maharashtra offers different types of loans to its customers, including the housing loan. The bank has Home Loans to suit every requirement from constructing a house to purchasing it outright. Loans are also available for home improvement and repairs. Bank of Maharashtra is an active lender in the Pradhan Mantri Awas Yojana.

The sterling features of Bank of Maharashtra Home Loan are the competitive rates of interest and low processing fees. Secondly, Bank of Maharashtra does not charge any foreclosure or prepayment penalty on its floating rate of interest Home Loans.

Bank of Maharashtra Home Loan Interest

Bank of Maharashtra has different types of interest rates on Home Loans:

  • Repo Rate Linked Lending Rate - RLLR

    On August 24, 2019, Bank of Maharashtra announced that it would link its retail loans with the repo rates, thereby making them cheaper. The RLLR loans will be available from September 01, 2019, for new customers alone. In due course, the bank will extend this benefit to existing customers, as well. Of the retail loans, Bank of Maharashtra has linked its Home Loan interest rate with the repo rate.

  • Marginal Cost of Funds based Lending Rate - MCLR

    Bank of Maharashtra follows the Marginal Cost of Funds based Lending Rate (MCLR) for existing customers. These rates also apply to the loans that have not yet been linked to the repo rates. Bank of Maharashtra offers these rates to customers who do not wish to opt for the RLLR-linked Home Loan interest rates.

  • Base Rate - BR

    Before the introduction of the MCLR concept, Bank of Maharashtra was following the Base Rate-linked rate of interest for all loans. Customers were given the option to switch over from the Base Rate to the MCLR. However, some customers could still be in the Base Rate structure.

  • Benchmark Prime Lending Rate - BPLR

    The BPLR was in force before the introduction of the Base Rate. As the Home Loan product is a long-term asset for the bank, there could be some borrowers in the BPLR category, as well. Therefore, Bank of Maharashtra announces the BPLR from time to time.

Bank of Maharashtra Home Loan Interest Rate Structure

  • The BPLR of Bank of Maharashtra with effect from 01.10.2011 is 15%
  • The Base Rate of Bank of Maharashtra with effect from 07.07.2018 is 9.50%
  • The MCLR structure is as follows with effect from 07.09.2019:
Tenor Applicable Residual maturity MCLR

Overnight MCLR

One day

8.15%

One-month MCLR

More than one day up to one month

8.25%

Three-month MCLR

More than one month up to three months

8.30%

Six-month MCLR

More than three months up to six months

8.40%

One-year MCLR

More than six months

8.50%

Bank of Maharashtra Home Loan Interest Table

Maha Super Housing Loan - For Construction or acquiring of new/existing house or flat and extension of the flat or existing home

Amount

CIBIL Score

Rate of interest

Effective rate

Rate of Interest

Effective rate

Salaried individual

Non-salaried individual

Up to 1 Crore

750 and above

MCLR-Y

8.50%

MCLR-Y + 0.05%

8.55%

700 to 749

MCLR-Y + 0.10%

8.60%

MCLR-Y + 0.20%

8.70%

650 to 699

MCLR-Y + 0.10%

8.60%

MCLR-Y + 0.30%

8.80%

600 to 649

MCLR-Y + 0.10%

8.60%

MCLR-Y + 0.40%

8.90%

Below 600

MCLR-Y + 0.20%

8.70%

MCLR-Y + 0.50%

9.00%

-1, 0, and 1 to 5

MCLR-Y + 0.05%

8.65%

MCLR-Y + 0.30%

8.80%

Above 1 Crore

750 and above

MCLR-Y + 0.10%

8.60%

MCLR-Y + 0.20%

8.70%

700 to 749

MCLR-Y + 0.20%

8.70%

MCLR-Y + 0.30%

8.80%

650 to 699

MCLR-Y + 0.20%

8.70%

MCLR-Y + 0.40%

8.90%

600 to 649

MCLR-Y + 0.20%

8.70%

MCLR-Y + 0.50%

9.00%

Below 600

MCLR-Y + 0.30%

8.80%

MCLR-Y + 0.75%

9.25%

-1, 0, and 1 to 5

MCLR-Y + 0.15%

8.65%

MCLR-Y + 0.50%

9.00%

Home Loan for repairs/renovations or alterations of existing house/flat for new and standalone borrowers

Amount Slabs

Rate of Interest

Effective Rate

Up to 1 Crore

MCLR-Y + 1.25%

9.75%

More than 1 Crore

MCLR-Y + 1.75%

10.25%

               
Maha Bank Top-Up Loan Scheme

Particulars

Deduction up to 60% of Gross Income

Deduction of more than 60% of Gross Income

Rate of Interest

Effective Rate

Rate of Interest

Effective Rate

Repairs/renovation or furnishing/extension of the house

MCLR-Y

8.50%

MCLR-Y + 0.25%

8.75%

Other purposes

MCLR-Y + 1%

9.50%

MCLR-Y + 1.25%

9.75%

Bank of Maharashtra Home Loan Interest - Points to Note

  • Bank of Maharashtra links its Home Loan interest rates to its one-year MCLR
  • This rate is a floating rate. Hence, any change in the MCLR will bring a corresponding change in the Home Loan interest rate.
  • Bank of Maharashtra Home Loan interest rate varies for salaries and non-salaried individuals
  • The housing loan interest rates depend on the credit rating of the individual. The better the credit score, the lower is the spread over the MCLR.
  • The rates of interest for PMAY accounts are also the same
  • Concessions in the interest rates are available for housing loan borrowers who maintain their accounts in the standard category for five years or more. The rate of discount is 0.50%. The effective rate after the deduction should not be below the MCLR-Y rate on that date.
  • Similarly, customers having a satisfactory relationship with Bank of Maharashtra for one year will receive a concession of 0.25%.

Bank of Maharashtra Home Loan Interest Calculation and Repayment Modes

Bank of Maharashtra charges Home Loan interest on a daily reducing balance basis. Thus, EMI should be the ideal repayment mode. Regular repayment of EMI can result in the gradual reduction of the interest charged during the month. Any default in payment of the EMI will entail the charging of penal interest for the default amount.

Bank of Maharashtra - EMI Calculation

Bank of Maharashtra has an EMI Calculator on its official website. Using this calculator enables the borrower to determine the EMI for the Home Loan. The borrower should submit the following necessary information:

  • Housing loan amount
  • Rate of interest
  • Loan repayment tenure

A similar EMI Calculator is also available on MyMoneyMantra. The procedure for determining the EMI is the same. Entering the loan amount, the interest rate, and the repayment tenure are enough for checking out the EMI.

Bank of Maharashtra - EMI Calculation for PMAY Accounts

The EMI calculation for PMAY accounts is different because of the upfront subsidy portion:

  • Every eligible PMAY borrower is eligible for a grant from the Government
  • The subsidy depends on the category to which the borrower belongs
  • The maximum loan amount eligible for subsidy calculation depends on the category of the borrower.
  • The maximum eligible subsidy is 2.67 Lakhs
  • The subsidy calculation involves calculating the 'NPV (Net Present Value) of the interest for 20 years @ 9%.
  • The PMAY official website has a PMAY subsidy calculator. It enables borrowers to arrive at the eligible subsidy depending on the loan amount, rate of interest, and loan tenure.
Category of the borrower Maximum annual income of the family Loan amount eligible for calculating subsidy Rate of subsidy Maximum amount of subsidy

Economically Weaker Section - EWS

3 Lakhs

6 Lakhs

6.50%

2.67 Lakhs

Low-Income Group - LIG

6 Lakhs

6 Lakhs

6.50%

2.67 Lakhs

Middle Income Group-I MIG-I

12 Lakhs

9 Lakhs

4.00%

2.35 Lakhs

Middle Income Group-II MIG-II

18 Lakhs

12 Lakhs

3.00%

2.30 Lakhs

  • The PMAY subsidy is an upfront subsidy
  • Bank of Maharashtra credits the subsidy received from the Government to the borrower's loan account.
  • The credit of the subsidy reduces the principal liability for the borrower
  • EMI is calculated on the approved loan amount less subsidy received
  • The bank continues to charge interest at the contracted rate
  • The loan eligibility amount can be more, but the amount eligible for calculating the subsidy remains as listed above. This difference amount is an unsubsidised loan.

Bank of Maharashtra - Home Loan Interest Rates - Frequently Asked Questions

How does Bank of Maharashtra calculate its RLLR?

Compared to the MCLR calculation, the RLLR computation is straightforward. RLLR depends on the following three factors.

  • The repo rate: RBI announces the repo rate from time to time. This rate is a market indicator.
  • Average net interest margin: Bank of Maharashtra loads the average net interest margin of the last ten years rounded off to the nearest' five basis points'.
  • The credit rating of the borrower: Borrowers with a better credit score benefit from a lower spread.

Why did RBI come up with the RLLR factor?

The primary objective of freeing the interest rate regime was to ensure that the ultimate customer benefited from the change in the market rates. The Base Rate and MCLR were notable attempts in this regard. However, RBI observed that banks were taking undue time to pass on the benefits of the market fluctuations to their customers. Hence, they have come up with a directive to the banks to switch over to an external benchmark lending rate. The repo rate is the ideal market-linked rate in this regard.

Which factors impact MCLR?

MCLR stands for Marginal Cost of Funds-based lending rate. It depends on the following factors:

  • The marginal cost of funds
  • Tenor premium
  • Operating cost
  • CRR Negative Carry

Of the two interest concepts, which is more beneficial to the customer?

Both MCLR and RLLR are market-determined rates. However, RLLR is a better option for customers because of the immediate benefit that passes on to them. Banks take a while to revise their MCLR. Secondly, the MCLR is a tedious calculation involving various factors. In comparison, RLLR is a straightforward calculation.

Does Bank of Maharashtra offer concession to women borrowers?

Bank of Maharashtra does not offer any special concessions to women borrowers. However, salaried individuals get a benefit in the interest rates when compared to non-salaried individuals.

Why do salaried borrowers get concessions in interest rates when compared to self-employed individuals?

The rate of interest on the Bank of Maharashtra Home Loan depends on the risk factor posed by the borrower. Salaried borrowers are perceived to have a lower risk profile as compared to self-employed individuals.

Does my credit score influence my interest rate?

Bank of Maharashtra offers concessions in the Home Loan interest rates to borrowers with excellent CIBIL scores. A score of 750 or more can fetch you the best interest rate on your Home Loan.

Does Bank of Maharashtra permit prepayment or foreclosure of a Home Loan?

Bank of Maharashtra allows prepayment or foreclosure of Home Loans at any time. There is no prepayment or foreclosure penalty, as well. Reserve Bank of India has clarified that borrowers with a floating rate of interest should not be charged any prepayment or foreclosure penalties.

Does Bank of Maharashtra offer fixed rate on Home Loans?

As on date, there is no fixed rate of interest on Home Loans by Bank of Maharashtra. In the past, the past, there was the concept of fixed and floating rates. Even today, many banks have a fixed-rate interest rate structure on Home Loans.

How is a floating rate of interest better than a fixed rate?

The floating rate of interest links to the MCLR or RLLR, both of which are market-linked rates. Therefore, any reduction in the market rates can bring a corresponding decrease in the Home Loan interest rates. It can thus, result in the reduction in your EMI or reduce your loan repayment tenure.

Bank of Maharashtra - Home Loan Interest Rates - Latest News and Snippets

Bank of Maharashtra links its retail loans with the RBI repo rate

With effect from September 01, 2019, Bank of Maharashtra will connect its interest rate on retail loans with the RBI repo rate. This rate structure will be available to new borrowers alone. The existing borrowers will get the benefit later. Bank of Maharashtra will offer their current customers an option to switch over to the RLLR.

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