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Home » Home loan interest in 2023: A complete guide about Home loan interest.

Home loan interest in 2023: A complete guide about Home loan interest.

Home loan

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.

BanksStarting Interest Rate (p.a.)Processing Fees
Aditya Birla8.50% p.a. onwards1%
Axis Bank8.60% p.a. onwardsRs. 10,000
Bandhan Bank8.65% p.a. onwards1% (Rs.5,000)
Bank of Baroda8.60% p.a. onwards
Contact the bank for information
Bank of India8.65% p.a. onwards
Bank of Maharashtra8.35% p.a. onwardsRs. 10,000
Canara Bank8.55% p.a. onwards
0.50% of the loan amount
Central Bank of IndiaContact the bankRs. 20,000
Citibank6.80% p.a. onwardsRs. 10,000
Federal Bank9.90% p.a. onwardsRs. 3,000 – Rs. 7,500
GIC Housing Finance8.10% p.a. onwardsRs. 2,500
HDFC Home Loans8.60% p.a. onwards*
0.5% or Rs.3,000 whichever is higher
HSBC Bank8.35% p.a. onwards1% (Rs. 10,000)
Hudco Home Loan8.35% p.a. onwardsNA
IDBI Bank8.75% p.a. onwards
0.50% (Rs. 2,500 – Rs.5,000)
IDFC First Bank8.75% p.a. onwardsRs. 5,000 – Rs. 5,000
India Shelter Finance13.00% p.a. onwards2.00%
Indiabulls8.95% p.a. onwards0.50% onwards
Indian Overseas Bank9.30% p.a. onwards
0.50% (Max Rs. 20,000)
Jammu and Kashmir Bank8.00% p.a. onwardsRs. 500 – Rs. 10,000
Karnataka Bank8.67% p.a. onwardsRs. 250
Karur Vysya Bank8.95% p.a. onwardsRs. 5,000
Kotak Mahindra Bank8.65% p.a. onwards0.50%
LIC Housing Finance8.90% p.a. onwards
Rs. 10,000 -Rs. 15,000
PNB Housing Finance Limited8.75% p.a. onwardsUp to 0.50%
Punjab and Sind Bank8.60% p.a. onwardsFull Waiver
Punjab National Bank8.55% p.a. onwards
0.35% (Max Rs. 15,000)
Reliance Home FinanceContact the bankRs. 3,000 – Rs. 6,500
Saraswat Bank Home Loan8.60% p.a. onwardsNil
Shriram Housing9.50% p.a. onwardsNA
South Indian BankRepo Rate + 3.35% p.a. onwards
0.50% (Rs. 5,000 – Rs. 10,000)
Standard Chartered Bank8.40% p.a. onwards1%
State Bank of India8.75% p.a. onwards0.35% onwards
Sundaram Home FinanceContact the bankRs.3,000 (for salaried)
Tamilnad Mercantile Bank8.75% p.a. onwardsRs. 15,000
Tata Capital8.95% p.a. onwards0.50%
UCO Bank8.75% p.a. onwards
0.15% (Rs. 1,500 – Rs. 15,000)
Union Bank of India8.60% p.a. onwards
Yes Bank8.95% p.a. onwards1% (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


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

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