The interest rate on a home loan plays a crucial role in determining the overall cost of buying a house. Since home loans are substantial and have long repayment terms, even a minor change in interest rate can result in significant financial impact, especially over the long term. Hence, before applying for a home loan, it’s advisable for prospective borrowers to compare the interest rates of various lenders to get the best deal. Here’s a list of current interest rates on home loans provided by top banks.
Banks | Starting Interest Rate (p.a.) | Processing Fees |
Aditya Birla | 8.50% p.a. onwards | 1% |
Axis Bank | 8.60% p.a. onwards | Rs. 10,000 |
Bandhan Bank | 8.65% p.a. onwards | 1% (Rs.5,000) |
Bank of Baroda | 8.60% p.a. onwards | Contact the bank for information |
Bank of India | 8.65% p.a. onwards | – |
Bank of Maharashtra | 8.35% p.a. onwards | Rs. 10,000 |
Canara Bank | 8.55% p.a. onwards | 0.50% of the loan amount |
Central Bank of India | Contact the bank | Rs. 20,000 |
Citibank | 6.80% p.a. onwards | Rs. 10,000 |
Federal Bank | 9.90% p.a. onwards | Rs. 3,000 – Rs. 7,500 |
GIC Housing Finance | 8.10% p.a. onwards | Rs. 2,500 |
HDFC Home Loans | 8.60% p.a. onwards* | 0.5% or Rs.3,000 whichever is higher |
HSBC Bank | 8.35% p.a. onwards | 1% (Rs. 10,000) |
Hudco Home Loan | 8.35% p.a. onwards | NA |
IDBI Bank | 8.75% p.a. onwards | 0.50% (Rs. 2,500 – Rs.5,000) |
IDFC First Bank | 8.75% p.a. onwards | Rs. 5,000 – Rs. 5,000 |
India Shelter Finance | 13.00% p.a. onwards | 2.00% |
Indiabulls | 8.95% p.a. onwards | 0.50% onwards |
Indian Overseas Bank | 9.30% p.a. onwards | 0.50% (Max Rs. 20,000) |
Jammu and Kashmir Bank | 8.00% p.a. onwards | Rs. 500 – Rs. 10,000 |
Karnataka Bank | 8.67% p.a. onwards | Rs. 250 |
Karur Vysya Bank | 8.95% p.a. onwards | Rs. 5,000 |
Kotak Mahindra Bank | 8.65% p.a. onwards | 0.50% |
LIC Housing Finance | 8.90% p.a. onwards | Rs. 10,000 -Rs. 15,000 |
PNB Housing Finance Limited | 8.75% p.a. onwards | Up to 0.50% |
Punjab and Sind Bank | 8.60% p.a. onwards | Full Waiver |
Punjab National Bank | 8.55% p.a. onwards | 0.35% (Max Rs. 15,000) |
Reliance Home Finance | Contact the bank | Rs. 3,000 – Rs. 6,500 |
Saraswat Bank Home Loan | 8.60% p.a. onwards | Nil |
Shriram Housing | 9.50% p.a. onwards | NA |
South Indian Bank | Repo Rate + 3.35% p.a. onwards | 0.50% (Rs. 5,000 – Rs. 10,000) |
Standard Chartered Bank | 8.40% p.a. onwards | 1% |
State Bank of India | 8.75% p.a. onwards | 0.35% onwards |
Sundaram Home Finance | Contact the bank | Rs.3,000 (for salaried) |
Tamilnad Mercantile Bank | 8.75% p.a. onwards | Rs. 15,000 |
Tata Capital | 8.95% p.a. onwards | 0.50% |
UCO Bank | 8.75% p.a. onwards | 0.15% (Rs. 1,500 – Rs. 15,000) |
Union Bank of India | 8.60% p.a. onwards | – |
Yes Bank | 8.95% p.a. onwards | 1% (Rs. 10,000) |
Are you only considering the interest rate when looking for a home loan? Well, it’s important to know that there are other factors that play a role in determining the right loan for you.
Don’t feel overwhelmed by all the information out there. Instead, take advantage of our team of experts who are ready to assist you in finding the perfect home loan that fits your specific needs. They’ll make the process simple and stress-free for you, so why not give them a call today?
What Are the Different Types of Home Loan Interest Rates ?
When taking out a home loan, there are two main types of interest rates to consider: fixed and floating.
A fixed interest rate means that the interest charge on the loan will remain constant throughout the loan term. This provides stability and predictability, making it easier to budget and plan for the loan repayment. It also protects against potential rate increases in the future, as the interest charge will not change regardless of market conditions. However, if market rates decrease, the fixed interest rate will not decrease, leaving the borrower paying a higher rate than necessary.
On the other hand, a floating interest rate is based on the current lending rate of the bank. This rate can fluctuate based on changes in market conditions and the bank’s lending rate revisions. The advantage of a floating interest rate is that if market rates decrease, the borrower may benefit from lower interest charges on their loan. However, if market rates increase, the interest charge on the loan will also increase. Despite this, floating home loan interest rates are often lower than fixed home loan interest rates, making it a more cost-effective option for some borrowers.
In conclusion, choosing between a fixed and floating interest rate depends on an individual’s personal financial situation and risk tolerance. A fixed rate provides stability and predictability, but may cost more in the long run if market rates decrease. A floating rate may be more cost-effective, but comes with the risk of potential rate increases. It’s important to carefully consider both options and consult with a financial expert to determine the best choice for your needs.
Determining Factors for Home Loan Interest Rates
When it comes to securing a home loan, there are a number of factors that banks consider in order to determine the interest rate they will offer. Let’s explore some of the most important ones:
Income: The bank will take into account your industry, employer, and income level. A stable, high income that is sufficient to afford the loan is more likely to result in a lower interest rate.
Credit Score: The bank will examine your credit report in detail to assess your credit history and standing. If you have a good credit score and are up-to-date with your payments, you are likely to receive a more competitive interest rate.
Location of Property: The location of the property being purchased can also impact the interest rate. Properties in prime locations or those purchased from trusted builders or agencies are often offered more favorable interest rates.
Loan Amount: The amount of the loan you are seeking can also influence the interest rate. As a general rule, larger loan amounts tend to result in lower interest rates.
Type of Loan: The type of home loan you are applying for can also impact the interest rate. For example, standard home purchase loans may come with standard interest rates, while home improvement loans may come with higher interest rates.
Loan Tenure: The length of the loan term can also affect the interest rate. Generally, longer loan terms tend to result in lower interest rates.
Type of Interest Rate: The interest rate offered will also depend on whether you choose a fixed or floating interest rate. Fixed rates are typically slightly higher than floating rates.
Employment Type: Salaried applicants are generally offered lower interest rates compared to self-employed individuals, due to the added risk involved. Banks often have separate interest rate slabs for salaried and self-employed applicants.
Ongoing Promotions and Offers: Keep an eye out for promotional offers made by lenders, both locally and nationally. Lenders often partner with builders, aggregators, and other organizations to offer custom deals that include competitive interest rates.
Learn more about the ongoing promotion offer
FAQs
According to RBI regulations, your bank is allowed to modify the spread components used in determining your home loan interest rate once every three years.
Yes, by including an earning female member of your family as a co-applicant, you may be able to secure a lower interest rate. Banks like SBI, HDFC, Union Bank of India, Bank of India, etc., offer interest rate discounts of 0.05% to female applicants.
Lenders generally provide lower interest rates to applicants with a credit score of 750 or higher. Some lenders may still offer home loans to applicants with a lower credit score, but at a higher interest rate. So, it’s advisable to aim for a credit score of 750 or above to be eligible for the best possible interest rate based on your credit profile