IDFC First Bank  
Home Loan Interest Rates

IDFC First Bank Home Loan involves the following Interest rates, fees and charges:

You can also Apply for Bank of Baroda Home Loan and check EMI, Interest rates and Eligibility Online.

• Purchase of Ready Property
• Purchase of Under Construction Property
• Home Construction Loan
• Composite Loan
• Loan on Plot Purchase
• Home Renovation Loan
• Home Loan Balance Transfer
• Top-up on Home Loan

You can also Calculate Rs. 5 Crore Home Loan EMI and compare interest rates with Top Banks.

Below is the comparison of IDFC First Housing Loan Interest Rate with other top five lenders:

IDFC First Home Loan Interest Rate is fixed as well as the. The bank follows the MCLR structure. The bank will soon switch over to the RLLR method, as Reserve Bank of India (RBI) has urged banks to switch over to the RLLR by October 01, 2019.

Marginal Cost of Funds-based Lending Rate (MCLR)

The MCLR is in force since April 01, 2016. Before the concept of MCLR, the banks were following the Base Rate system with effect from July 01, 2010. The Base Rate system was also a market-related rate system. However, banks were slow in passing on the benefits of market fluctuations to their customers. Therefore, the concept of MCLR came into being.

MCLR comprises of the following key aspects:

• Marginal Cost of Funds: The marginal cost of funds involves the marginal cost of borrowings and the return on the net worth of the bank.
• Tenor Premium: This factor does not have any connection with the borrower type or category. It is the same irrespective of the type of borrower financed by the bank.
• Operating Cost: This aspect deals with the cost incurred by the bank in mobilising enough funds for financing. It excludes the charges that are recoverable by the bank by way of processing fees.
• CRR Negative Carry: There is a negative carry on the CRR when the returns on CRR are less than the cost of funds.

All these factors combine to decide the MCLR of the bank. Each bank has its MCLR. Usually, banks announce their MCLR monthly. However, the resetting of the MCLR linked to the loan accounts do not take place immediately. It depends on the reset frequency decided by the individual bank. If the bank goes for an annual reset, the benefit of the market rate fluctuation does not reach the ultimate beneficiary until the reset date.

In the meanwhile, the market rates can go up again as well. Therefore, RBI observed that banks were lagging in passing over the benefit to their customers. This reluctance on the part of the bank forced RBI to come up with a solution in the form of linking the interest rates to an external benchmark rate. The repo rate is one such vital rate.

Repo Rate Linked Lending Rate (RLLR)

The RLLR is a better indicator of the market rate because of its direct link with the repo rate.

RLLR comprises of only three factors:

• Repo Rate: The Reserve Bank of India announces the Repo Rates from time to time. The latest announcement envisages the reduction of repo rates from 5.90% to 6.25%.
• The Average Net Interest Margin: Banks add the average net interest margin of the last ten years to the repo rate as the interest spread. In doing so, the banks round off the net interest margin to the nearest '5 basis points'.
• The Credit Score of the Borrower: The CIBIL score or the internal credit rating of the borrower is an integral factor of RLLR. The lower the score, the more will be the spread. Therefore, borrowers with good CIBIL scores benefit from the concept of RLLR.

You can also check Latest PNB MCLR Rate Online.

• IDFC First Bank Home Loan interest rate is linked to its MCLR-3M rate
• The spread on the Home Loan ranges up to 3.50%

The following factors decide the rate of interest on the Home Loan for the individual borrower:

• The amount of loan
• The loan tenure
• The nature of security on offer
• The credit history of the borrower
• The rates of interest for the PMAY Home Loans are the same. The only distinction is in the determination of the EMI for the Home Loan.
• You can compare IDFC First Home Loan Interest Rates Online with other lenders on MyMoneyMantra.

IDFC First Bank calculates Home Loan interest on the daily reducing balances method. This method is the best one that offers the best benefits to the borrower. You can use IDFC First Home Loan Interest Rate Calculator available online to calculate the applicable rate.

IDFC First Bank Home Loan - PMAY Subsidy

PMAY Home Loans are unique because of the upfront subsidy factor. The Government of India releases the PMAY subsidy that is to be credited upfront to the borrower loan account. Therefore, the loan liability of the borrower decreases by the amount of grant. The calculation of EMI is done based on the reduced principal amount.

The benefits accruing to the borrower because of PMAY upfront subsidy are as follows:

• The EMI reduces considerably because of the upfront crediting of subsidy into the loan account
• The interest liability of the borrower also decreases because of the reduction in the principal loan amount.

Calculation of PMAY Subsidy

The calculation of PMAY subsidy is a complicated one:

• Take out the amortisation schedule of the Home Loan at the contracted rate of interest for the entire loan tenure.
• The loan amount eligible for a subsidy depends on the category of the borrower
• Calculate the ''Net Present Value' of the interest amount for 20 years at a notional interest rate of 9%.
• Ensure that this amount does not exceed the maximum eligible subsidy for the borrower. It depends on the category of the borrower.

Alternatively, use the PMAY subsidy calculator provided on the PMAY official website to determine the subsidy amount.

Check out the procedure of How to Apply for Pradhan Mantri Awas Yojana Online.

The ideal mode of Home Loan repayment is the EMI.

Calculation of EMI

• IDFC First Bank has an EMI Calculator on its official website. Use this calculator to determine your EMI. The borrower has to enter the loan amount, the rate of interest, and the loan repayment tenure to get the EMI instantly.
• MyMoneyMantra has a similar Home Loan EMI Calculator on its website. Browse the official site of MyMoneyMantra and select the Financial Tools option.
• Choose the EMI Calculator and enter the data requested. You get your EMI and the breakup of the principal and interest repayment for the entire loan repayment tenure. 

You can also use Loan Prepayment Calculator to find out how much you will save on interest and how it affects your  Loan EMI.