Union Bank of India (UBI), a government-owned bank, is known for offering affordable and flexible home loan solutions across India. With competitive interest rates, minimal documentation, and options tailored for different borrower categories including salaried, self-employed, and NRIs, Union Bank has become a preferred lender in the housing finance market in 2025.
Key Features of Union Bank Home Loan
- Loan Amount: Up to ₹10 crore (depending on location and income)
- Loan Tenure: Up to 30 years
- Interest Rate: Floating and fixed options available
- Repayment Options: Flexible EMI structure, step-up or step-down EMIs
- Prepayment Charges: Nil on floating rate loans
- Purpose: Purchase, construction, extension, renovation, and balance transfer
Union Bank Home Loan Interest Rates (2025)
Union Bank links its floating rates to the RBI’s Repo Rate (External Benchmark Lending Rate – EBLR). Your interest rate depends on your credit score, income, and loan amount.
- Starting Rate: From 8.20% p.a.
- Typical Range: 8.20% – 10.15% p.a.
- Women Borrowers: May get 0.05% interest concession
- Credit Score Impact:
- Above 750: Eligible for best rates
- 700–750: Slightly higher rates
- Below 700: May face higher interest or reduced eligibility
- Above 750: Eligible for best rates
Types of Union Bank Home Loans
- Regular Home Loan – For purchase or construction of a residential property
- Home Extension Loan – For adding rooms, floors, etc.
- Home Renovation Loan – For repairs or upgrades to existing property
- Plot + Construction Loan – Buy land and construct a house on it
- Top-Up Loan – Additional loan on an existing home loan
- Union Awas – Special scheme for low-income borrowers and rural housing
- Balance Transfer – Switch your home loan from another bank to UBI for lower interest
- NRI Home Loan – Tailored for Non-Resident Indians
Eligibility Criteria
- Age: 18 to 75 years (at the end of the loan tenure)
- Nationality: Indian Residents, NRIs, and PIOs
- Income:
- Salaried: Minimum ₹20,000/month
- Self-Employed: Minimum ₹2.5 lakh annual income (may vary)
- Salaried: Minimum ₹20,000/month
- Credit Score: Preferably 700+
- Co-applicant: Allowed (spouse, parent, or earning member in family)
Documents Required
For Salaried Borrowers:
- PAN, Aadhaar, passport-size photo
- Salary slips (last 3–6 months)
- Form 16 or ITR
- Bank statement (last 6 months)
- Employment ID or offer letter
For Self-Employed:
- ITR for last 2–3 years
- Business registration/license
- Balance sheet and profit & loss statement
- Bank statements
Property Documents:
- Title deed, sale agreement
- Approved building plan
- Encumbrance certificate (EC)
Fees and Charges
- Processing Fee:
- Typically 0.50% of the loan amount
- Minimum ₹5,000 and maximum ₹15,000 (can vary by scheme)
- Typically 0.50% of the loan amount
- Legal & Valuation Charges: Separate, based on property and city (₹3,000–₹10,000 range)
- Prepayment Charges:
- Floating rate loans: NIL
- Fixed rate loans: 2% (if paid from external source)
- Floating rate loans: NIL
- Rate Conversion Fee: If switching to a lower interest rate later: ~₹5,000–₹10,000
Unique Features
- Union Smart Save Scheme: A home loan linked to a savings account. Any surplus funds deposited reduce the loan’s interest burden.
- Online Application: Apply digitally and upload documents through UBI’s online portal.
- Women & Senior Citizen Benefits: Preferential rates and priority processing.
- Flexible EMI Plans: Borrowers can choose step-up or step-down EMI based on career stage.
EMI Example (2025)
Let’s say you borrow ₹40 lakh for 20 years at an interest rate of 8.25%:
- Monthly EMI: Approx. ₹34,000
- Total Interest: Around ₹41 lakh
- Early Prepayment of ₹5 lakh after 3 years: You could save over ₹6–7 lakh in total interest
Pros and Cons
Advantages:
- Competitive interest rates and flexible eligibility
- Long repayment period up to 30 years
- No prepayment charges on floating loans
- Specialized options for NRIs, women, and low-income borrowers
- Availability of overdraft-style savings-linked repayment plans
Limitations:
- Processing times may be longer in rural branches
- Some fixed-rate loans have prepayment penalties
- Legal and valuation fees not included in loan amount
Tips Before Applying
- Improve your credit score to 750+ before applying for better rates.
- Use an EMI calculator to choose the right tenure and EMI balance.
- Negotiate fees during festive campaigns or online application drives.
- Choose joint application to improve eligibility and repayment capacity.
- Opt for floating rate if you expect interest rate trends to go downward.
Final Thoughts
Union Bank of India offers reliable and flexible home loan products for a wide range of needs. Its rates are competitive with major public and private sector banks, and borrower-friendly terms like zero prepayment charges and digital processing make it a solid choice in 2025. Whether you’re a salaried employee, business owner, or an NRI, UBI has a home loan tailored for you.