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    • Home Loan Interest Rates

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    Compare the lowest home loan interest rates starting from 6.70% p.a. and apply for the best home loan. Get the complete list of current housing loan rate of interest in India from all leading banks and financial institutions.

    Home Loan Interest Rates for all Banks 2020

    Banks Interest Rates Processing Fees
    Union Bank of India 6.70% - 7.15% p.a. Up to 0.50% (max. Rs. 15,000) + GST
    Bank of Baroda 6.85% - 7.85% p.a. 0.25% to 0.50%
    Central Bank of India 6.85% - 7.10% p.a. 1% (or Min. Rs.10,000)
    Bank of India 6.85% - 7.75% p.a. 0.25% (Max. Rs.20,000)
    Canara Bank 6.90% - 8.90% p.a. 0.50% (Max. Rs.10,000)
    LIC Housing Finance 6.90% onwards Rs. 10,000- Rs.15,000 (+Service Tax)
    Punjab and Sind Bank 6.90% - 7.25% p.a. Up to 0.50% (max. Rs. 15,000) + GST
    State Bank of India 6.95% - 7.50% p.a. Rs.2,000 – Rs.10,000
    HDFC Ltd. 6.95%* - 8.20% p.a. Up to 0.50%
    ICICI Bank 6.95% - 8.05% p.a. 0.50% to 1%
    IDFC First Bank 7.00% p.a. Rs.10,000
    Punjab National Bank 7.00% - 7.60% p.a. 0.35% + GST
    Bank of Maharashtra 7.05% - 8.45% p.a. 0.25%
    UCO Bank 7.15% - 7.20% p.a. 0.50%
    DBS Bank 7.30% - 7.80% p.a. upto Rs.10,000
    Kotak Mahindra Bank 7.40% - 9.70% p.a. up to Rs.10,000
    Indian Overseas Bank 7.45% - 7.70% p.a. 0.50%
    Citibank 7.50% - 8.25% p.a. Rs.10,000
    South Indian Bank 7.70% - 8.95% p.a. 0.50% (Max. Rs.10,000)
    Jammu and Kashmir Bank 7.70% - 8.00% p.a. 2% - 3%
    Axis Bank 7.75% - 8.55% p.a. Up to 1%
    IDBI Bank 7.80% - 8.80% p.a. 0.50%
    HSBC Bank 7.95% - 8.05% p.a. Rs.10,000 or 1% of Loan Amount
    United Bank of India 8.00% - 8.15% p.a. Rs.1000/ or Above
    Federal Bank 8.15% - 8.30% p.a. 0.5% (Max Rs 7500)
    Karur Vysya Bank 8.20% - 10.05% p.a. Rs.2,500 - Rs.7,500
    Sundaram Home Finance 8.25% p.a. 0.50% - 1%
    Dhanalakshmi Bank 8.25% - 9.40% p.a. 1%
    Karnataka Bank 8.35% - 9.18% p.a. 0.50% to 2.00%
    Tata Capital 8.50% p.a. 2%
    Tamilnad Mercantile Bank 8.65% p.a. 2% or Rs.15,000/-
    IIFL 8.70% p.a. 1.25%
    Bandhan Bank 8.75% - 11.75% p.a. 1% of Loan Amount
    PNB Housing Finance 8.85% - 9.85% p.a. Up to 0.25% (max. Rs. 15,000) + GST
    Standard Chartered Bank 8.86% - 9.19% p.a Upto 1.00%
    Indiabulls 8.99% p.a. max. 1% on loan
    Aditya Birla 9.00% – 12.50% p.a. upto 1% on loan amount
    GIC Housing Finance 9.10% - 12.50% p.a. Min Rs.2500/-
    Yes Bank 9.35% - 10.50% p.a. Up to 2%
    Hudco Home Loan 9.45% p.a. Nill
    DHFL Housing Finance 9.50% p.a. onwards Rs 2500/- (+ GST+ document charges)
    Reliance Home Finance 9.75% - 13.00% p.a. 0.5% - 1.5%
    Aavas Financiers 10.00% - 19.00% p.a. Up to 2% plus GST
    Shriram Housing 10.49% p.a. As Per Application
    India Shelter Finance 13.00% - 20% p.a. Up to 3%
    Note: Home loan rates for all banks are updated on 11 Aug 2020. *HDFC Ltd Home Loans Interest rate at 6.95% p.a. onwards is for women. Union Bank of India home loan interest rate at 6.70% is available for Salaried Women customers with Cibil score above 700 applying for a loan up to 30 Lakhs

    Types of Interest Rates in Home Loan

    There are mainly two types of home loan interest rates charged by most of the banks.

    1. Fixed Interest Rate:

    In this system of computation, the rate remains even throughout the loan tenor. There will be no change in the interest charges since the rate remains fixed. Depending on the offer, you may be allowed to switch over to the floating rate system after completing a certain duration into the loan tenure.

    • Advantage: Since the rate remains fixed, you know how much interest charges you’re paying upfront. Your loan will be shielded from frequent rate fluctuations and saves money in a longer run if there is a hike in lending rates.
    • Disadvantage: If the standard lending rates fall, you will not benefit since the interest component remains frozen.

    Read More: Fixed Home Loan Rates

    2. Floating Interest Rate:

    The interest charges on your home loan is subject to the current most lending rates of the bank. The rate is linked to the latest published rate of the bank which in turn depends on multiple factors such as RBIs monetary policy and lending rate revisions, the bank’s response to the revision etc.

    • Advantage: The most visible perk of opting for the floating rate is that you have the advantage of being billed on the basis of the latest rate. If the rates fall, you save on interest charges.
    • Disadvantage: In rare scenario, if the standard rates go up, the loan has to be bear the brunt of being billed a higher rate.

    Note: But, the floating home loan interest rates are cheaper than the fixed home loan interest rates on the first front.

    Factors that Determine Home Loan Interest Rates

    There are multiple factors driven by your background and income group which influence the rate bank offers you. Let’s look at some of leading factors to help you negotiate the best rate.

    • Income: The industry you work and your employer both has a say along with the income factor. A stable and high income, sufficient enough to afford the loan will be rewarded with a lower interest rate.
    • Credit Score: When you apply, the processing involves a thorough scrutiny of your credit report. It involves checks on your past and current credit. It you’re up to date with a good credit score, you’re likely to get a competitive rate. A good credit history also gives you the confidence to negotiate a good deal.
    • Location of the Property: The location and vicinity has a bearing too. If the property is situated in a prime location or is being procured from a trusted builder/agency, you can look forward to an optimal charge on the interest rate front.
    • Loan Amount: The proposed loan amount has the ability to influence the rate. The thumb rule is, higher the loan amount, chances are that you will get a lower rate.
    • Type of Loan: The rates offered also depends on the types of home loan you’re availing. Standard loans such as home purchasing will come at standard rates while its counterparts like home improvement can be charged a higher rate.
    • Loan Tenure: The loan tenure opted for has a say when the bank decides the interest rate to be offered to you. Chances are that if you’re willing to opt for a longer term, the interest rate offered is lower.
    • Type of Interest Rate: The interest charges on your home loan is dependent on the “Fixed” or the “Floating” rate you opt for. The fixed rate is slightly higher than its counterpart.
    • Employment Type: Salaried applicants are likely to get a slightly lower rate compared to the self-employed, owing to the risks involved. Banks’ maintain separate slabs for salaried and self-employed applicants.
    • Ongoing Promo Offers: Lookout for promo offers made by lenders on multiple fronts, made locally and some at the national level. In their quest to come up with the most customer centric schemes, lenders will tie up with multiple partners such as builders, aggregators to offer tailor made deals which includes competitive rates.
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    How to Calculate the Effective Interest Rate:

    The applicable interest rate on home loan consists of two components, the base rate and markup rate. The combination of two is what you will be paying on the loan. Let's explore these components to give you a better understanding.

    • Base Rate: It is the standard lending rate of the bank, applicable for all retail loans. This rate is subject to frequent changes on the basis of multiple inputs.
    • Markup: This component of a small percentage is added to the base rate to arrive at the EIR (Effective interest rate) for a specific type of home loan and varies from one type to another.

      Effective Interest Rate (EIR) = Base Rate + Markup

      To Calculate EMI: Use Home Loan EMI Calculator

    • From April 2016 onwards, the Reserve Bank of India (RBI) has mandated a new method for computing lending rate to replace the base rate system. The Marginal Cost of Funds based Lending Rate (MCLR) is aimed at bringing more accountability and flexibility to the way rates are published by banks and financial institutions in India. RBI mandates banks to fix the interest rate after studying the risk factor associated with lending to borrowers. It takes into account, various factors involved such as repo rate, deposits etc.

      This MCLR based computation works out to be slightly lower than the erstwhile base rate.

    Things to Look

    The most important thing that you have look at is the cost of the house and the way you plan to finance it. There are many banks in India that offer amazing home loan schemes at affordable rates of interest. If you are confused and unable to decide which scheme you should apply for, then you must follow the rules mentioned below:

    Compare home loan interest rate August
    • Compare Interest Rates – If you find a home loan scheme with the lowest rate of interest, do not apply for it in a haste. Look at all the terms and conditions associated with the scheme and try to find out why the rate is so low compared to other house loans. Experts advise people to compare the interest rates of different house loan schemes before applying.
    • Read Lender’s History – Before you borrow a home loan from a bank or any other lender, ensure that you are familiar with its history. Loans are a liability and can result in huge financial problems if you borrow money from an unknown or untrusted lender. You have to look for news about the different lenders online, read up on their history and check out reviews of the services and products they offer. You can also contact mortgage brokers or experts to find out information about any lender.
    • Make a Down Payment – While applying for a home loan, ensure that you make a down payment. Do not be attracted by schemes that do not require any down payment. If you apply for a home loan without paying any money upfront, then you might not realise and pay more interest. Also, the more money you pay as down payment, the lower your EMIs will be, which means that you will be able to repay your loan earlier.
    • Read the Fine Print – It is very important that you read the fine print before you take a home loan. It may look long and you may be lazy, but reading it will save you from future shocks. The fine print document will contain all the information and term and conditions related to the loan you plan to apply for. If you are unable to understand the clauses mentioned in this document, then ask the help of a Chartered Accountant.
    • Understand the Fees and Charges – There are many fees and charges associated with a home loan such as late payment fee, prepayment fee, processing fee, legal charges, documentation charge, etc. You should make yourself aware of all these fees and charges. Ask the lender to give you a list of all the fees in writing.
    • These are only some of the many rules that you must follow while applying for a home loan. Apart from the above, you should also find out about the tax benefits on home loan and how you can claim them. Once you get your home loan, make sure you pay the EMI on time every month.

    Home Loan Recent News Headings

    • HDFC Bank Reduces its MCLR by 10 bps

      HDFC Bank has reduced its MCLR on loans across tenors by 10 basis points. The rate cut has been effective from 7 August 2020. Lat month as well, the bank had cut its MCLR across all tenors. The website of HDFC Bank had given the new rates after the rate cut. The overnight MCLR now stands at 7%. While the one-month MCLR has been cut to 7.05%, the one-year MCLR is 7.35%. The three-year MCLR is now 7.55%.

      10 August 2020

    • Speculations Arise for Reverse Repo Rates by the Reserve Bank of India to Help Credit Flow

      The Reserve Bank of India may reduce the reverse repo rates in attempting to prioritise various measures to help with credit flows. Along with this, the RBI may also push banks to lend after the United States Federal Reserve had indicated a delay in the global economic recovery. The RBI may not change the repo rate but may cut down the reverse repo rate to help banks lend to companies according to a survey. Another installment for a Targeted Long-Term Repo Operations is also being considered by the Reserve Bank of India to help better the system liquidity.

      04 August 2020

    • Private banks to reduce rates -PSU banks offer HL at 6.70%

      Home loan interest rates have dipped over the past few months with the lowest interest rate standing at 6.70% p.a. As per reports, private sector lenders are also looking to reduce their interest rates on loans as public sector banks and housing finance have reduced their home loan rates. Earlier, LIC Housing Finance (LICHFL) had slashed their rates to 6.90%.
      SBI is now offering home loans from 6.95%. A few PSU banks offer home loan rates which are at 6.7% to 7.1%. Union Bank is now offering the lowest floating rates at 6.7%, Bank of Baroda, Bank of India and Central Bank of India are at 6.85% interest.

      29 July 2020

    • LIC Housing Finance slashes home loan interest rates to 6.90%

      LIC Housing Finance has introduced an all-time low interest rate of 6.9% for new home loan borrowers. The new rate can be availed by current borrowers as well. The interest rate is for those borrowers who have a CIBIL score of 700 and above and looking for a home loan of up to Rs.50 lakh. For a loan above Rs.50 lakh, the rate of interest is 7%.

      It must be noted here that the mortgage lender has launched a special home loan product called ‘Griha Varishtha’ for pensioners. The loan can be repaid in 30 years or till the attainment of 80 years.

      23 July 2020

    • Speculations of another rate cut by 75 bps from RBI in October as GDP likely to contract

      The Reserve Bank of India may cut down rates by 75 bps in October depending on various factors even though June CPI inflation recording higher that the mandate at 6.1%. Inflation is peaking off from 7.2% in April.   

      Along with this, the disruption of supply due to the national lockdown have resulted in the price hike temporarily. With CPI inflation dipping to 2.5% in H2FY21 on good rains, base effects, low demand and tight equity, the RBI is expected to cut 25 bps in August and 50 bps in October.   

      The rate cut will be an answer in response to the aftermath of COVID-19 on the economy. With inflation crossing the mandate of 2-6% at 6.1%, remission is expected to be seen before the bigger cut of 50 bps in October. All this, assuming the GDP contracts by 4% with the lockdown stretching to September and restarting takes all of October. However, with the world economy waiting for a vaccine, the GDP for FY21 could likely contract by 7.5%, in which case the RBI may cut another 200 bps in FY21.   

      21 July 2020

    • Public Sector Banks reduce interest rates for home loans

      The State Bank of India is offering home loans with interest rates starting at 6.95% which will be the second-lowest rate of interest for home loans compared to Bank of Baroda’s interest rate at 6.85% onwards. In the second week of the month, the State Bank of India announced a reduction in the external benchmark linked lending rate from 7.05% to 6.65% and also reduced the MCLR from 7.25% to 7.00%.

      The interest rates for home loans have been dipping after the Reserve Bank of India reduced their policy rate in order to revive the economy after it was hit by the novel pandemic, COVID-19. In the last monetary policy meeting, the repo rate was reduced by 40 bps by the Central Bank to 4% and reduced the reverse repo rates to 3.35%.

      The actual rate of interest for a home loan depends on the loan amount and profile of the borrower or loan applicant. For salaried customers, the rate of interest is 7% for the loans amounting up to Rs.30 lakh and for loans above Rs.30 lakh and till Rs.75 lakh, the rate of interest is 7.25%, and for the loans amounting to more than Rs.75 lakh, the interest offered is 7.35%.

      7 July 2020

    • Repo rate now stands at 4%

      RBI governor on Friday announced a cut in the repo rate by 40 basis points. The cut in the rates saw repo rate drop to 4% from the existing 4.40%. The reverse repo rate was also reduced to 3.35% from 3.75%. Addressing his third press conference regarding COVID – 19 related measures, the governor stated that the monetary policy committee (MPC) met for an off cycle meeting for the past three days where five members voted for a reduction in the rates.

      22 May 2020

    • National Housing Bank to receive Rs.10,000 crore for refinancing facility

      RBI Governor Shaktikanta Das on Friday announced a refinancing facility worth Rs.50,000 crore to boost the housing finance sector. The development comes after NABARD, SIDBI, and National Housing Bank (NHB) approached the government to help them with liquidity as they were suffering due to tight liquidity conditions. As part of the Rs.50,000 crore package announced by RBI, NHB will be getting Rs.10,000 crore and will be charged at the current repo rate of 4.4%. NABARD and SIDBI will be getting Rs.25,000 and Rs.15,000 crore respectively.

      It must be noted here that the government has allowed non-banking financial companies (NBFCs), housing finance companies (HFCs) and microfinance institutions (MFIs) to operate with bare minimum staff amid the extended lockdown.

      20 April 2020

    • RBI reduces reverse repo rate to 3.75%

      RBI Governor Shaktikanta Das while addressing the media for the second time within a month announced that the central bank has slashed the reverse repo rate by 25 basis points. The decision to cut the rates have been taken to make the option of parking cash with the central bank less attractive. The new reverse repo rate shall be 3.75%. On March 27, RBI had brought down the reverse repo rate to 4% by reducing it by 90 basis points.

      17 April 2020

    • Home loan interest rates cut by HDFC Limited and Bank of Baroda

      HDFC Limited and Bank of Baroda have cut their home loan interest rates marginally. According to experts, even though the two banks have reduced the interest rates, other banks may not reduce the rates until April.

      HDFC Limited reduced its retail prime lending rates by 5 basis points on 5 March 2020. According to the details available on the official website of HDFC Limited, the prime lending rate is 16.6%. According to HDFC, the new rates will be effective from 9 March 2020 and will benefit existing home loan customers. According to its website, the lowest home loan rate is at 8%. The mark-up charges have been reduced by Bank of Baroda. However, only new customers can benefit from the reduction in interest rates. Bank of Baroda has brought down the spread by 15 bps. The new home loan rates were effective from 1 March 2020. The lowest interest rate offered by Bank of Baroda for home loans is 8%. According to experts, other lenders may not cut the lending rates. According to the Co-Founder and CEO of MyLoanCare.in, Gaurav Gupta, most banks have already priced their loans aggressively. He further added that State Bank of India has the lowest interest rate on home loans at 7.95%.

      5 March 2020

    • RBI does not make any changes to the repo rate

      As widely expected, the Reserve Bank of India (RBI) maintained an accommodative stance and did not make any changes to the repo rate on 6 February 2020. The repo rate continues to be at 5.15%.

      The main aim of not making any changes to the repo rate was to support the economy. Last year, the repo rates were slashed by 135 basis points by the Monetary Policy Committee (MPC). The repo rates were slashed by 135 basis points over five meetings in a row. However, no changes were made to the repo rate in December due to inflation worries. The repo rate was decided to remain the same by all six members of the committee. According to RBI, the inflation outlook looks uncertain. RBI further stated that the MPC will continue to be vigilant about the inflationary pressures. The GDP growth was pegged at 6% by the RBI for the financial year 2020-2021. The retail inflation forecast of the apex bank was also increased to 6.5% for the March quarter. For the first half of the financial year 2021, the retail inflation forecast has been set at 5% - 5.4%.

      7 Feb 2020

      

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