HSBC Home Loan Interest Rates
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About HSBC Bank

HSBC has a reputation for being one of the world's largest banking and financial services organisations. The banking conglomerate has an extended network covering 65 countries all over Europe, the Middle East, Asia, Africa, North America, and Latin America. The banking corporation specialises in four banking verticals, Retail Banking and Wealth Management, Global Banking and Market, Commercial Banking, and Global Private Banking.

HSBC has a presence in India for more than 160 years when their first mercantile bank was established in Mumbai. Today, HSBC is available in almost all the major cities in India. It offers some of the best customer experiences to its vast clientele. Some of its notable retail banking products on display are the credit cards and Home Loans.

HSBC Home Loans

HSBC offers Home Loans and loan against property as one of its vital retail products. One of the critical attractions of HSBC Home Loans is the reasonable and competitive rates of interest. The bank has a transparent service charge framework to provide the highest degree of credibility.

Other exciting Home Loan features are the facility to enquire and apply for your Home Loan online. Every customer gets the service of a dedicated relationship manager to help through the loan sanctioning process. Facilities like Smart Home Loans enable the borrowers to save on the interest component while making their regular repayments.

HSBC Home Loans - Features and Benefits

HSBC has two primary Home Loan products:

HSBC Home Loan

  • Target: Salaried persons and self-employed individuals/professionals
  • Purpose: Purchase readymade properties or houses under construction, and home improvement
  • Quantum of the loan: Ranging from 3 Lakhs to 10 Crores
  • Repayment tenure: Flexible tenures extending up to 25 years for salaried persons and 20 years for self-employed individuals.
  • Rate of interest: Floating rates of interest starting from 8.65% with a fixed rate option available

HSBC Smart Home Loan

The loan is similar to the HSBC Home Loan but with a difference:

  • Links with a current account whereby excess balances in the current account helps to save on the interest component.
  • Rate of interest starts from 8.80% with no option for a fixed rate of interest
  • Involves a commitment fee component

Besides the Home Loan product, HSBC offers Loan against Property. The bank also used to offer a unique product named MyHome. This product allowed the borrowers to vary their EMI every year by 15% (higher or lower). The bank has now discontinued this loan product.

HSBC Home Loan Interest Rate

HSBC offers floating rates of interest on Home Loans linked to the Bank's 3M-MCLR. HSBC announces its MCLR every month, but the loan interest rates are reset quarterly. The 3M-MCLR published at the beginning of the month will be the benchmark rate for loans disbursed in that month. The resetting of the Home Loan interest rates happens on the 7th calendar day of the month.

MCLR of HSBC as on September 02, 2019 is as here under:

Tenor Overnight 1M-MCLR 3M-MCLR 6M-MCLR 1Y-MCLR

MCLR

8.15%

8.15%

8.30%

8.40%

8.50%

The Home Loan rate of interest links to the 3M MCLR announced by the bank from time to time.

The existing Home Loan interest rates are as follows:

HSBC Home Loan

  • Salaried Person: 8.65% onwards
  • Self-employed Individual: 8.75% onwards

HSBC Smart Home Loan

  • Salaried Person: 8.80% with commitment fee and 9.20% without commitment fee
  • Self-employed individual: 8.90% with commitment fee and 9.30% without commitment fee

HSBC Home Loan Interest Rate - Working of the MCLR Concept

HSBC announces its MCLR before the 7th of every month. All loans disbursed during the month will link to the 3M-MCLR announced during the month. The reset frequency of the MCLR is three months. Thus, loans disbursed in January will have resets in April, July, and October. Similarly, loans disbursed in February have reset options in May, August, and November. The cycle continues in this manner. 

HSBC Home Loan Interest Rate - Scenario before the MCLR Concept

The MCLR concept is in vogue since April 01, 2016. Before April 2016, HSBC used to link its Home Loans to its Base Rate. The Base Rate concept was valid from July 01, 2010. Prior to July 2010, the Retail Lending Rate was in force. HSBC announces the Base Rate and Retail Lending Rates as well at regular intervals.

 The Base Rate of HSBC with effect from June 2017 is 8.90%.

 The Retail Lending Rate of HSBC valid from June 2017 is 16.15%.

HSBC Home Loan Interest Rate - Mode of Calculation of Interest

HSBC calculates Home Loan interest on a daily reducing balance method. This mode of calculating interest is the most beneficial to the borrower. It ensures that the borrower gets the benefit of interest calculation on the EMI from the date of payment.

HSBC Home Loan Interest Rate - Calculation of EMI

HSBC provides the facility of calculating the EMI on its website. The official webpage of the bank has an EMI Calculator to assist customers in determining their EMI.

  • Access the EMI Calculator
  • Enter details like loan amount, rate of interest, and loan repayment tenure
  • Get the EMI amount in instantly

Alternatively, customers can use the EMI Calculator provided on the MyMoneyMantra website. The procedure is the same.

  • Access MyMoneyMantra
  • Choose Financial Tools and select EMI Calculator
  • Enter the details asked for
  • Get the EMI on clicking the 'Calculate' option
  • The customer also gets information about the breakup of principal repayment and interest over the entire loan repayment tenure.

HSBC Home Loan Interest Rate - Mode of Repayment

  • Submitting PDC or registering for an ECS mandate is the best mode of repayment for a borrower not having an account with HSBC.
  • HSBC account holders can issue a standing instruction to the bank to recover the EMI from the respective savings or current account.

HSBC Home Loan - Service Charges

Nature of Service Charges Amount

Processing fee

1% of the sanctioned amount or 10,000 whichever is higher.

Conversion fee

0.50% of the outstanding loan amount or the current account limit whichever is higher.

Commitment fee

1% on the amount above 25% of the SHCF sanctioned amount.

Prepayment charges

  • Floating Rate Loans: NIL
  • Fixed-Rate of Interest Loan:
    • Up to 25% - NIL
    • Above 25% - 3% of the prepaid amount

Delay in payment of instalment because of cheque bouncing

250 per occasion

Penal interest on delayed instalments

2% over the existing rate of interest on the Home Loan

HSBC Home Loan - How to Apply

HSBC website has the facility where the applicant can enquire about the Home Loan online:

  • Access the HSBC Home Loan webpage and click on the 'Enquire Online' option
  • Complete the details sought for and apply online
  • The HSBC representative will contact you to complete the formalities

MyMoneyMantra offers you the option to apply for HSBC Home Loan online:

  • Access MyMoneyMantra
  • Choose Home Loan
  • Submit the information called for by MyMoneyMantra
  • Enter the OTP at the relevant place to confirm the genuineness of the query
  • You get access to the Home Loan comparison page where you can check out all the Home Loan products on a single page.
  • Select HSBC as your loan provider
  • The site directs you to the official webpage of HSBC from where you can apply for your Home Loan online.

Advantages of Using the Services of MyMoneyMantra

  • Compare different Home Loan products on a single page
  • Get expert guidance from MyMoneyMantra Home Loan specialists
  • Ensure proper documentation to eliminate chances of rejection
  • These services are available free of cost

HSBC Home Loan Interest Rate - Frequently Asked Questions

Has HSBC switched over to the external benchmark rate?

No, HSBC has not switched to the external benchmark rate like many other banks have done. Various banks have adapted the repo rate as an external benchmark. HSBC is still following the MCLR rate structure.

How does the MCLR structure work in HSBC?

HSBC has a transparent procedure as far as interest rate pricing is concerned. The bank publishes or announces the MCLR every month by the first week. The Home Loan interest rate links to the 3M-MCLR of the bank. The MCLR reset date is the 7th day of the month. However, the reset does not happen to all the Home Loan accounts at the same time.

The MCLR announced at the start of the month applies to all Home Loans disbursed during the month. This example will set things right.

Example - The MCLR announced at the start of Month 1 will apply to all Home Loans disbursed during Month 1. The next reset for these loans will be the 7th day of Month 4. The subsequent reset dates are 7th of Month 7 and Month 10 respectively. Month 2 will have a new MCLR. These rates will not apply to the loans disbursed in Month 1 immediately. It will only apply to loans sanctioned/disbursed/reset during Month 2. The subsequent dates of resetting are Month 5, Month 8, and Month 11. The same procedure continues.

Can two Home Loans sanctioned in subsequent months have different rate structures?

Yes, it is possible. The rates can be different for one account when compared to another sanctioned/disbursed during the subsequent month. However, after the reset date, the accounts will end up with the same interest rate unless the MCLR changes drastically every month.

Will HSBC inform the borrower of the change in the interest rate whenever it happens?

Yes, HSBC will inform the customer via email and SMS whenever there is a change in the interest rate. The difference in the interest rate can also entail a change in the loan structure. The EMI could change. A change in the loan tenure is also possible.

How does HSBC treat the change in the interest rate?

A change in the interest rate can cause a difference in the EMI or the loan tenure. Usually, HSBC keeps the EMI constant while altering the mandate accordingly. However, HSBC has the right to change the EMI without changing the tenure. In any case, the bank is bound to inform the customer about any change in the repayment schedule.

Will the interest spread change at any time during the loan period?

Under normal circumstances, the margin or the spread on your Home Loan interest rate does not change. However, if there is a substantial change in asset quality, HSBC can change the margin on the interest rate. However, the bank will inform the customer of their decision to change the interest spread.

Can the borrower change from one loan type to another, such as from Smart to Normal and vice versa?

Yes, the customer has the option to change from one type of account to another subject to the payment of a conversion fee of 0.50%.

What is the commitment fee component on the HSBC Smart Loan?

The Smart Loan concept links the Home Loan to the current account of the borrower. The balances in the current account serve to reduce the balance outstanding in the loan account. Thus, the borrower saves on the interest component.

This example will clear the matter. Assume the original sanction amount is 20 Lakhs with a defined limit of 25%. The bank charges a commitment fee of 1% on the balances maintained above the threshold. In the above case, if the balance in the current account is 6 Lakhs, it is 1 Lakh more than the threshold amount. The bank charges a 1% commitment fee on this excess amount of 1 Lakh.

Therefore, there are two interest rate structures in the Smart Home Loan product. The borrower can opt for an interest rate structure that comes without the commitment fee. It is 0.40% more than the regular interest date as on date.

Is there a fixed rate of interest structure in HSBC?

Yes, the HSBC regular Home Loan product comes with a fixed-rate option. The Smart Home Loan product does not come with this fixed-rate option.

Can a borrower switch over from one variant of the Home Loan to another at any time?

Yes, the borrower can switch over from the Normal to the Smart Home Loan, vice versa, and from one variant of the Smart Home Loan to another by paying the conversion fee of 0.50% of the limit outstanding. 

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