Yes Bank Home Loan Interest Rate
Interest Rate

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Loan Tenure

- years

Lowest EMI Per Lakh

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Prepayment Charges

Nil charges for floating rates loans

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About Yes Bank

Yes Bank opened its innings in the Indian financial market in 2004 with the opening of its first branch in Mumbai. Since 2004, the bank has grown exponentially to have more than 1000 branches and 1800 ATMs all over India. From its humble beginnings, it has now attained the position of being the fourth largest private sector bank in India. Yes Bank competes on even terms with many nationalised banks, as it has a Pan-India presence in all the 28 states and 9 Union Territories in India. Besides, Yes Bank has an IBU at GIFT City and a representative office in Abu Dhabi.

Yes Bank Home Loan

Yes Bank offers an array of deposit and loan products. It has loan products to suit every section of society. One of the most popular Yes Bank loan products is the Home Loan. Yes Bank offers Home Loans for the purchase of new/second-hand property. There are also loan products for the construction of homes and home improvement/renovation. These loans are available for salaried and non-salaried individuals. Balance Transfer facility is also available with Yes Bank. Some of the salient features of Yes Bank Home Loan are the competitive rates of interest and attractive processing fees. As Yes Bank has a presence all over India, it is a member lending institution for the Pradhan Mantri Awas Yojana.

Yes Bank Home Loan Interest Rate Concept

Reserve Bank of India or RBI has specified that all banks should shift to a more transparent interest rate mechanism. It observed that banks were delaying the passing of the benefits of the market rate adjustments to the ultimate customer. Hence, it has now prescribed October 01, 2019 as the date before which all banks should link their loans, especially the retail advances to an external benchmark-linked rate.

Most of the banks have adopted the repo rate as the base for fixing the interest rates on Home Loans and other retail loans. Yes Bank has not made any announcement in this regard but will have to do so very soon.

Repo Rate Linked Lending Rate Concept

The repo rate-linked lending rate system has three components:

  • Repo Rate: The repo rate is the rate at which banks borrow from the RBI. Usually, it is an overnight rate system. RBI has recently decreased the repo rate by 35 basis points to bring it to 5.40%. The repo rate is a real indicator of market rates. The MCLR has an indirect linking with the repo rate, as well.
  • Average Net Interest Margin: The bank loads the average net interest margin for the last 10 years rounded off to the 'nearest five basis points'.
  • CIBIL Rating of the borrower: The RLLR depends on the credit rating of the borrower. Hence, a borrower with an excellent CIBIL score of 750 or more can get a better interest spread on the Home Loan interest when compared to an applicant who has a low CIBIL score.

Marginal Cost of Funds-based Lending Rate Concept

Yes Bank follows the Marginal Cost of Funds-based Lending rate concept (MCLR). This rate depends on specific aspects such as:

  • Marginal cost of funds: comprises of the marginal cost of borrowings and return on net worth
  • Tenor premium: This factor will be common for all borrowers, as it cannot be borrower-specific or loan-specific.
  • Operating cost: Cost involved in raising funds for the loan excluding those recoverable by way of processing fees and other charges.
  • CRR negative carry: This factor will arise when the actual returns of CRR balances are less than the cost of funds.

The MCLR is effective from April 01, 2016. All banks link their loans to the MCLR. Yes Bank announces its MCLR from time to time.

Base Rate Concept

The Base Rate concept was in force before the introduction of the MCLR. All loans sanctioned by banks between July 01, 2010 and March 31, 2016, are linked to the Base Rate structure. Though customers have the option of switching over to the MCLR concept, many of them have chosen to remain with the Base Rate. Therefore, Yes Bank announces its Base Rate, as well at regular intervals.

Before the Base Rate concept came into effect, Yes Bank was following the Benchmark Prime Lending Rate (BPLR).

Yes Bank Home Loan Interest Rate Structure

  • Yes Bank Benchmark Prime Lending Rate: 19.75% with effect from July 26, 2011
  • Yes Bank Base Rate: 10.25% with effect from October 05, 2015
  • Yes Bank MCLR: With effect from September 02, 2019
Tenor MCLR

Overnight MCLR

8.00%

One-month MCLR

8.80%

Three-month MCLR

9.20%

Six-month MCLR

9.40%

One-year MCLR

9.70%

Yes Bank links its housing loans to the three-month, six-month, and the one-year MCLR:

Yes Bank - Regular Home Loans

Home Loan variant

Linked to 3-month MCLR

Linked to 6-month MCLR

Linked to 1-year MCLR

Vanilla/Margin-based/Loan Takeover/Income/RTR Based

MCLR + 0.65%

MCLR + 0.45%

MCLR + 0.15%

Effective Rate of Interest

9.85%

9.85%

9.85%

Surrogate Program/Top Up Loans

Not offered

MCLR + 1.10% to MCLR + 3.10%

MCLR + 0.80% to MCLR + 2.80%

Effective rate of interest

NIL

10.50% to 12.50%

10.50% to 12.50%

Yes Bank - Khushi Home Loans

Home Loan variant

Linked to 3-month MCLR

Linked to 6-month MCLR

Linked to 1-year MCLR

Vanilla/Margin-based/Loan Takeover/Income/RTR Based

MCLR + 1.05% to MCLR + 1.55%

MCLR + 0.85% to MCLR plus 1.35%

MCLR + 0.55% to MCLR + 1.05%

Effective Rate of Interest

10.25% to 10.75%

10.25% to 10.75%

10.25% to 10.75%

Surrogate Program/Top Up Loans

Not Offered

MCLR + 1.60% to MCLR + 3.60%

MCLR + 1.30% to MCLR + 3.30%

Effective Rate of Interest

NIL

11.00% to 13.00%

11.00% to 13.00%

Yes Bank Home Loan Interest Rate - Points to Note

  • Yes Bank offers Home Loans on a fixed rate and floating rate basis
  • The rate of interest ranges from 9.85% to 13%
  • Factors that affect the rate of interest include the following:
    • Type of loan: Top up loans cost more than the regular Home Loans. Similarly, surrogate loan programs have a higher rate of interest as compared to regular loans.
    • The credit rating of the borrower: Applicants having an excellent credit rating get the advantage of a lower interest spread.
    • Nature of income: People with a regular source of income get a better rate as compared with those having irregular income. Similarly, people with income levels as low as 9,000 per month can avail Yes Bank Khushi Loans at a higher rate of interest as compared to regular Home Loans.

Yes Bank Home Loan - Interest Rate - PMAY

Yes Bank is one of the top lenders in the Pradhan Mantri Awas Yojana. The rate of interest on PMAY loans is the same as listed above. The rate of interest on an individual PMAY loan depends on the following factors:

  • Applicants having a regular source of income and file ITR can apply for PMAY loans under the regular Home Loan scheme.
  • Similarly, applicants filing ITR but not having a regular source of income like salary can also apply under the regular Home Loan scheme.
  • Individuals not filing ITR but having income can apply under both the regular Home Loan and Khushi Home Loan product.
  • Applicants drawing income as low as 9,000 per month can apply under Khushi Home Loan scheme.

PMAY Home Loan Interest Subsidy

PMAY Home Loans come with an upfront interest subsidy element. The Government of India grants these allowances to eligible borrowers under PMAY. The subsidy is to be credited upfront to the Home Loan account of the borrower. Thus, it can affect the EMI on the Home Loan.

  Economically Weaker Section EWS Low-Income Group - LIG Middle-Income Group-I MIG-I Middle-Income Group-II MIG-II

Maximum Annual family income

3 Lakhs

6 Lakhs

12 Lakhs

18 Lakhs

Loan amount eligible for PMAY subsidy

6 Lakhs

6 Lakhs

9 Lakhs

12 Lakhs

Rate of subsidy

6.50%

6.50%

4.00%

3.00%

Maximum subsidy amount

2.67 Lakhs

2.67 Lakhs

2.35 Lakhs

2.30 Lakhs

Yes Bank Home Loan Interest - Method of Calculation and Repayment Options

Yes Bank calculates Home Loan interest on the daily reducing balance method. Therefore, the ideal repayment option is EMI.

How to Calculate Yes Bank EMI?

Yes Bank has an EMI Calculator on its website to help you calculate the EMI on the Home Loan. The calculator is easy to use. One has to submit the necessary information like loan amount, rate of interest and repayment tenure to get the EMI.

MyMoneyMantra has a similar EMI Calculator that customers can use to confirm the EMI.

PMAY Loan - Effect of Subsidy on the EMI

The upfront interest subsidy affects the EMI on loan considerably. On crediting the eligible subsidy amount to the Home Loan account, the principal amount of the loan reduces. Thus, the EMI on loan decreases, as well.

Yes Bank Home Loan Interest - Frequently Asked Questions

What is the surrogate loan programme of Yes Bank?

Calculating Home Loan eligibility is a critical part of any Home Loan proposal. Salaried persons or those filing regular IT returns should not have any difficulty in satisfying eligibility norms. However, some self-employed persons have income but do not file income tax returns. The surrogate loan programmes are helpful to such people, as Yes Bank gauges their income from other sources like bank statements, invoices, and so on. Such borrowers have to pay a higher rate of interest as compared to regular Home Loan borrowers.

Who qualifies for a Home Loan under Khushi Home Loan Scheme?

Khushi Home Loan Scheme is for those individuals having income as low as 9,000 per month. Such people can apply under the Pradhan Mantri Awas Yojana to avail interest subsidy. If they do not have documentary evidence of their income, they can apply under the surrogate loan programme.

How does one calculate the PMAY interest subsidy?

The PMAY interest subsidy calculation is a complicated one. One has to obtain the Home Loan repayment schedule and find out the present value of interest for each of the 20 years. One can calculate the same using MS Excel tables. Alternatively, the PMAY official website has an interest subsidy calculator. This calculator is easy to use. The PMAY subsidy is calculated assuming the rate of interest to be 9% throughout the tenure. 

What are the points to note in the PMAY subsidy?

One should note the following points in connection with the PMAY subsidy:

  • The loan amount eligible for calculation of PMAY subsidy for each category of borrower is different
  • For EWS and LIG, the maximum loan amount eligible for subsidy calculation is 6 Lakhs
  • For MIG-I and MIG-II, it is 9 Lakhs and 12 Lakhs respectively
  • The notional rate of interest for the calculation of subsidy is 9%
  • The subsidy is calculated on the NPV of the interest charged to the account for a maximum of 20 years.
  • The subsidy is an upfront one, thereby affecting the EMI of the borrower

How does PMAY subsidy affect the EMI?

This simple example will make it convenient for all.

Consider a PMAY borrower in the MIG-I category who has taken a loan of 10 Lakhs from Yes Bank at 10% interest for 20 years. The EMI works out to 9,650. The borrower is eligible for a maximum subsidy of 2.35 Lakhs. Thus, the principal amount of the loan reduces to 7.65 Lakhs after the credit of the upfront subsidy. Thus, the EMI now reduces to 7,382.

Can I avail a loan of 25 Lakhs under PMAY and still claim subsidy?

The loan amount is immaterial. The maximum loan amount eligible for calculation is 6 Lakhs for EWS, 9 Lakhs for MIG-I, and 12 Lakhs for MIG-II. Any loan amount more than these numbers is treated as unsubsidised loans.

Can I avail income tax concessions on the repayment of my Yes Bank Home Loans?

Yes, Income tax concessions are available under Sec 24 and Sec 80C of the IT Act for repayment of Home Loan interest and principal amounts respectively.

  • Interest repayment: Maximum of 2 Lakhs per annum per borrower under Sec 24
  • Principal repayment: Maximum of 1.50 Lakhs per annum per borrower under Sec 80C

Can I foreclose my Home Loan with Yes Bank?

Yes Bank offers the facility to foreclose your Home Loan or make part prepayments. It does not charge any penalty for foreclosure and prepayments on the floating rate on interest loans. For borrowers opting for a fixed rate of interest, Yes Bank charges a penalty of 2.50% on the principal amount outstanding.

What is the fixed rate of Home Loans in Yes Bank?

The fixed-rate is calculated on a case-to-case basis. The interest rate range is the same for floating and fixed rates. However, the fixed rate for a customer is higher than the floating rate if the borrower had availed the same.

Which of the two rates is a better option, a fixed rate or a floating rate of interest?

It depends on the circumstances. If the market rate is in a falling regime or remains constant, the floating rate is beneficial. Otherwise, the fixed rate can be a better option.

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