Home Loan Interest Rate
Compare the lowest home loan interest rate starting from 7.10% p.a. and apply for the best home loan. Get the complete list of current housing loan rates of interest in India from all leading banks and financial institutions.
Home Loan Interest Rate of all Banks 2026
The home loan interest rates of various Indian banks in 2026 are listed in the table below:
Banks | Starting Interest Rate (p.a.) | Processing Fees |
7.70% p.a. onwards (floating) 12.00% p.a. (fixed) | Up to 2% of the loan principal amount + GST (Zero fee for online applications) | |
7.15% p.a. onwards (floating) 11.40% p.a. onwards (fixed) | 0.50% of the loan amount with a maximum of Rs.15,000 + GST | |
7.20% p.a. onwards (floating) 8.90% p.a. onwards (fixed) | Min: Rs.8,500; Max: Rs.25,000 | |
7.10% p.a. onwards | 0.50% of the loan amount plus taxes, subject to a maximum of Rs.20,000 | |
7.10% p.a. onwards (floating) 10.65% p.a. (fixed) | 0.25% of the loan amount, subject to a minimum of Rs. 1,500 up to a maximum of Rs.20,000 | |
7.25% p.a. onwards | 0.35% of the loan amount plus GST. Minimum of Rs.3000 + GST up to Rs.12,000 + GST | |
7.75% p.a. to 13.20% p.a | Up to 0.50% of loan amount subject to minimum Rs.4,000 | |
7.15% p.a. onwards | 0.25% of the loan amount for loans up to Rs. 1crore, subject to a maximum of Rs. 15,000 plus GST | |
8.00% p.a. onwards (floating) 14.00% p.a. (fixed) | Up to 1% of the loan amount, subject to minimum of Rs.10,000 plus applicable taxes | |
7.15% p.a. onwards | Contact the Bank | |
7.10% p.a. onwards | 0.25% of the loan amount plus taxes for loans above Rs.75 lakhs | |
8.85% p.a. onwards | Up to 3% of the overall loan amount. | |
7.15% p.a. onwards | Up to 0.25% of loan amount, subject to a maximum of Rs.25,000 | |
Punjab National Bank (PNB) | Floating:7.75% p.a. Fixed: 14.75% p.a. | 0.35% of the loan amount, subject to a minimum of Rs.2,500 up to Rs.15,000 |
7.35% p.a. onwards | 0.50% of the loan amount plus applicable taxes | |
7.45% p.a. onwards (floating) 12.75% (fixed) | Contact the Bank | |
8.50% p.a. onwards | Contact the Bank | |
7.35% p.a. onwards | Rs.2,500 to Rs.7,500 plus GST onwards | |
7.25% p.a. onwards | 0.25% of the loan amount + GST subject to a minimum of Rs. 2000 + GST up to Rs. 50,000 + GST | |
7.20% p.a. onwards | 0.50% of the loan amount plus GST, subject to a minimum of Rs. 10,000 + GST up to Rs.50,000 + GST | |
7.30% p.a. onwards (floating) | 0.50% of the loan amount with a minimum of Rs. 10,000 and a maximum of Rs. 2 lakh | |
7.99% p.a. onwards | 1% of sanctioned loan amount | |
7.30% p.a. onwards (floating) | 0.25% of loan amount (for KBL Xpress Home loan for loan amount Rs.75 lakh: Nil) | |
Contact the Bank | Contact the Bank | |
7.65% p.a. onwards | 1.00% of the loan amount, plus service tax (with a minimum of Rs.10,000 Plus service tax). | |
7.50% p.a. onwards | Rs.999 + GST (initial fees) | |
8.80% p.a. onwards | 0.50% of the loan amount + GST | |
8.41% p.a. onwards | Contact the Bank | |
9.00% p.a. to 11.50% p.a. | 1.5% of the loan amount plus GST or Rs.10,000 + GST, whichever is higher | |
9.20% p.a. to 9.70% p.a. | Contact the Bank | |
Contact the bank | Contact the NBFC | |
8.80% p.a. onwards | Rs.2,500 + applicable GST | |
Truhome Finance | 8.50% p.a. onwards | At NBFC’s discretion |
Contact the NBFC | Contact Indian Shelter Finance |
Note: The rate of interest mentioned above are updated in is updated on 6 March 2026 and are subject to change at the discretion of the bank
How to Calculate Interest on Home Loan?
In general, home loans are long-term loans and it is important to figure out your overall interest liability towards the loan in the first place.
1. Using an EMI Calculator
A home loan EMI calculator is the easiest way to estimate your interest liability. You need to enter:
- Loan amount (principal)
- Loan tenure
- Rate of interest
The calculator will provide a detailed breakdown, including EMI, total payment, and total interest.
2. Using the EMI Formula
You can calculate your EMI manually using the formula below (easy to copy into Word):
EMI = (P × r × (1 + r)^n) / ((1 + r)^n − 1)
Where:
- P = Loan amount (principal)
- r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = Number of monthly instalments
Example Calculation
Let’s assume:
- Loan amount (P) = Rs 50,00,000
- Interest rate = 8% per annum
- Loan tenure = 20 years = 240 months
Step 1: Convert interest rate to monthly rate r = 8 ÷ 12 ÷ 100 = 0.006667
Step 2: Apply the formula EMI = (50,00,000 × 0.006667 × (1 + 0.006667)^240) / ((1 + 0.006667)^240 − 1)
EMI ≈ Rs.41,822
Step 3: Calculate total payment Total Payment = 41,822 × 240 = Rs.1,00,37,280
Step 4: Calculate total interest Total Interest = 1,00,37,280 − 50,00,000 = Rs.50,37,280
Summary
- Monthly EMI: Rs.41,822
- Total Interest Payable: Rs.50,37,280
- Total Amount Paid: Rs.1,00,37,280
How to Calculate the Effective Interest Rate?
Home loan interest rate is determined from two components: a benchmark rate plus an additional spread set by the lender, which makes an effective interest rate (EIR) to signify what a borrower will pay throughout the full term of the loan.
In India, home lending rates are established and monitored by the Reserve Bank of India, and the way the rates are established has changed over time so that they can more appropriately serve borrowers by being clearer and easier to understand.
Previously, a base rate was used to charge home lending rates, but this was changed to a marginal cost of funds based lending rate (MCLR) in April 2016. Then, in October 2019, banks were required to link all floating-rate home loans to an external benchmark (such as the repo rate) so that any adjustments to the policy rate would reflect more quickly to the borrower.
The Effective Interest Rate is calculated using two main components:
- A benchmark rate is a reference point for interest rates charged on a loan and is typically reviewed on a quarterly basis. The benchmark rate may be derived from an MCLR or an external benchmark (such as the repo rate) and will be adjusted based on current market and regulatory conditions.
- Spread (markup) represents an extra percentage charged by the bank for lending money based on the borrower’s creditworthiness, loan tenor, and risk profile. Typically, the spread is set when you apply for a loan.
Thus, The Effective Interest Rate is simply the sum of these two components. Any revision in the benchmark rate by the Reserve Bank of India can directly impact the borrower’s EMI or loan tenure, making it important to understand how these elements work together.
Types of Interest Rates in Home Loan
There are mainly two types of home loan interest rates charged by most banks.
- Fixed interest rate: A fixed interest rate means the level of interest will remain unchanged for a period of time, or in some cases the length of the loan. This provides a certain degree of stability and predictability in regard to the amount of money required to be repaid each month (EMI) during that period. However, often lenders will put in a reset clause within the loan documents, which allows them to change the interest rate after a specified time.
- Floating interest rate: A floating interest rate fluctuates over time based on a number of benchmark rates (e.g., repo rate, MCLR) as published and guided by the Reserve Bank of India. Thus, any movement in those benchmark rates results in a direct impact to both the applicable interest rate and EMIs and/or the time to repay the loan.
| Fixed interest rate | Floating interest rate |
Advantage | Borrowers have clarity in terms of their obligation to make payments as the EMIs do not change due to fluctuations in the market. This is particularly beneficial in an environment of increasing interest rates. | When the benchmark interest rates decrease, borrowers benefit from paying a lower EMI due to the reduction in the applicable interest rate and/or the time to repay the loan. |
Disadvantage | When the market interest rates decrease, the borrower will not have the benefit of paying a lower interest rate and will typically end up paying more than a borrower with a float rate. | When the benchmark interest rates increase, the cost of borrowing (higher EMIs) increases. |
How to Apply for a Home Loan?
Follow the instructions given below to apply for a home loan:
- Step 1: Complete the Loan Application: To begin with, complete the application for a home loan, providing all necessary details about yourself
- Step 2: Submit Documentation & Verifications: After submitting your documentation to the lender, they will verify the information you have and will also review your credit report. If there are any discrepancies between the information submitted by you and the bank's records, this could result in a delay in your approval.
- Step 3: Loan Processing & Sanctioning of the Loan: The lender reviews the documents submitted along with your payment history and will also review your credit report in monitoring all loan applications. After reviewing your loan application, the bank will send you an approval letter to indicate that they have sanctioned your loan. The time it takes to process a loan Application varies from a few days to a few weeks.
- Step 4: Legal and Technical Review of the Property Documents: The lender will complete the legal and technical review of the property being purchased that will include the verification of property ownership, approvals and/or construction quality if the property is currently under construction.
- Step 5: Payment for Processing Fee: When you have finished submitting your documents and verification, you will need to pay a processing fee to obtain the lender's approval on the loan application. This fee is normally charged by the lender as a cost of evaluating your Home Loan application and is usually a certain percentage of the total loan amount that will be paid to the lender.
- Step 6: Completion of Loan Agreement & Disbursement of Funds: You will receive an approval from the lender on the loan application if everything is in order. You can sign the loan agreement, and the loan funds will be released to either the builder or seller in part or in full.
How lenders decide home loan interest rates
The home loan rate is decided by combining the following factors:
Category | Factor | Detailed explanation & impact on interest rate |
External | RBI repo rate | The rate at which the Reserve Bank of India lends money to banks. When this rate increases, lenders raise home loan interest rates; when it decreases, home loan rates usually come down. |
Inflation & economic conditions | Inflation refers to rising prices in the economy. Higher inflation leads to higher interest rates. Overall economic conditions (growth, slowdown, instability) also influence how lenders adjust rates. | |
Market competition | Competition among lenders can push them to offer lower interest rates to attract more borrowers, especially in a competitive lending market. | |
Borrower | Credit score | A measure of creditworthiness (such as CIBIL score). A higher score shows lower risk and results in lower interest rates, while a lower score leads to higher rates. |
Income & employment stability | Lenders assess income level and job stability. Higher income and stable employment reduce default risk, helping borrowers secure better (lower) interest rates. | |
Repayment history | Your past behaviour in repaying loans. Timely repayments improve trust and can result in lower interest rates, while poor history increases rates. | |
Loan | Loan amount & tenure | The total loan size and repayment period are important. Larger loans and especially longer tenures may increase the lender’s risk and can affect the interest rate or total interest payable. |
Loan-to-value (LTV) ratio | The proportion of the property value financed by the loan. A lower LTV (meaning a higher down payment by the borrower) reduces lender risk and can lead to lower interest rates. | |
Type of interest rate | Fixed interest rates remain constant throughout the loan tenure, while floating rates change based on market conditions and benchmark rates. | |
Property and Rate Structure | Property factors & benchmark rate | Property location, condition (ready or under construction), and legal approvals affect risk. Final interest rate is calculated as a benchmark rate (often repo-linked) plus the lender’s margin based on risk assessment. |
FAQs on Home Loan Interest Rates
- How to get lowest home loan rates in India?
To get the lowest home loan interest rates, compare rates offered by lenders. Always use a home loan EMI calculator while comparing rates; it will help you estimate how much you have to pay every month against your loan.
- What is the home loan interest rate?
The Home loan interest rate is the percentage of the principal amount charged by the lender to the borrower for using the principal amount. The interest rate charged by banks and non-financial institutions determine the cost of your home loan. So, when you are paying your home loan EMI (equated monthly instalment), the interest rate charged determines how much you have to pay your lender against your loan every month. Interest rates are usually linked to repo rates and can vary from lender to lender.
- How to reduce home loan interest?
Choose a shorter tenure – For long term loans, though the EMI is less, the overall cost of the loan drastically increases because you are paying interest for a longer period of time. So, choose shorter tenures as the interest amount will get much lower with time. Use a home loan EMI calculator while comparing long-term and short-term home loans.
- How home loan risk weightage is linked to the LTV Ratio?
An LTV or a loan-to-value ratio is the percentage of the property cost that the bank will finance while the rest of the amount is financed by the homebuyer. Most banks finance up to 90% of the property cost. This percentage may vary depending on the loan amount. Lenders generally use LTVs to determine how risky the loan is and whether they will approve or deny it.
- Can I switch from a fixed rate of interest to a floating rate and are there any associated charges?
Yes, you have the option to switch from a fixed rate to a floating rate of interest during the loan period. However, please note that lenders typically impose a conversion fee of 0.5% of the outstanding principal for this switch.
- How can I check total interest payout for my housing loan?
Use a home loan EMI calculator to check your total interest payout against your loan. Just enter the loan amount, tenure, and interest rate. Upon calculation, you will not only be able to check your EMI, but also a detailed break-up of your repayment schedule through an amortisation table. Through the amortisation table representing your repayment schedule, you can check how much interest you have paid against your loan.
- How is the processing fee for a home loan determined?
The processing fee for a home loan varies among financial institutions. Some institutions charge a fixed amount, while others calculate it as a percentage of the loan amount, typically ranging from 0.5% to 1%.
- What are the primary factors affecting my home loan interest rate?
Your home loan interest rate is influenced by various factors, including the MCLR rates, fixed or floating interest rates, Loan-to-Value (LTV) ratio, your credit score, the location of the property, your job profile, and the tenure of the Loan.
- How often will the interest rates on my home loan, based on EBLR, change throughout the tenure?
The frequency of changes in the interest rates of your EBLR-based home loan depends on the external benchmark interest rates used by your bank and their rate reset schedule. Banks are required to reset their EBLR-linked interest rates at least once every three months.
- Can the component of credit risk premium of my home loan rate of interest change during the loan tenure?
According to RBI guidelines on external benchmark-based lending rates, banks are permitted to adjust the credit risk premium component if there is a significant change in the borrower's credit risk assessment during the loan tenure.
News about Home Loan Interest Rate
RBI Cuts Repo Rate to 5.25% and Raises Growth Forecast
On 5 December 2025, the Reserve Bank of India announced its monetary policy decision. The new policy led by Governor Sanjay Malhotra, in which it was decided to cut the repo rate by 25 points from 5.50% to 5.25% and kept a neutral stance. The RBI also raised its FY26 GDP growth forecast from 6.8% to 7.3% and lowered the FY26 inflation forecast from 2.6% to 2%. To make sure banks have enough money to lend, the RBI said it will buy government bonds worth Rs.1 lakh crore and do a three-year USD/INR swap of $5 billion in December. The meeting was held when the economy was growing well, inflation was low, and the rupee was nearly 90 per US dollar. With this, the RBI has cut the repo rate by a total of 125 points in 2025.
Disclaimer
Credit Card:
Credit Score:
Personal Loan:
Home Loan:
Fixed Deposit:
Copyright © 2026 BankBazaar.com.