Union Bank home loan rates up 0.5%

Union Bank of India said it would raise home loan rates by 50 basis points across the board from January 1, 2004.

Thus, fixed rate loans for 5-10 years will cost 9 per cent and those for over 10 years 9.25 per cent.

Floating rate loans will, however, cost 25 basis points less than fixed rate loans of the same tenor. Floating loans will henceforth be linked to the bank's benchmark prime lending rate (BPLR).

Union Bank chairman and managing director V Leeladhar said home loan interest rates had bottomed out and there was no scope for further reduction.

The bank has also slashed rates on loans to the agriculture and small-scale sectors, depending on the advance.

There was a feeling that agriculture, small-scale industries and other priority sectors were being deprived of the benefits of falling interest rates, Leeladhar pointed out.