Union Bank home loan EMI could remain constant or change depending on whether you have taken a fixed-rate home loan or floating-rate home loan. 

  • In fixed-rate home loans, the EMI remains constant throughout the loan tenure. The interest is decided at the time of loan sanction and remains the same for the entire loan tenure. 
  • In floating-rate home loans, the EMI fluctuates depending on the prevailing interest rates. Here the interest rate for your home loan is linked to the REPO rate fixed by the RBI. Depending on external interest rates, the EMI can either increase or decrease from time to time. Such fluctuations can impact borrowers since they have to ensure timely loan repayment despite interest rate movements.

What happens when the external home loan interest rate increases?

In the event of a rise in interest rates, Union bank may allow the option of increasing the EMIs or increasing loan tenure. This can be beneficial for borrowers who either do not want to take the extra burden of higher EMIs every month. It can also benefit those who can afford to pay higher EMIs and would like to close the loan faster.

What happens when the external home loan interest rate decreases?

If Union Bank home loan interest rates decrease, then it can benefit borrowers as subsequent EMIs may come down. If a borrower can afford to pay higher EMIs, he/she can opt for a shorter loan tenure with the objective to close the loan faster. 

Borrowers can now use an online EMI calculator before availing of a loan or while a loan is ongoing to estimate the monthly payments that will have to be made towards the loan. This can allow borrowers to chalk out a financial plan for the near future without causing stress on their financial situation.