A "low interest" loan shouldn't mean you have very little interest in paying it back!
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    Home Loan Interest Rates

    We found 49 Home Loan Interest Rates

    Bank Name
    Interest Rate Range
    Processing Fee Range
    Loan Amount
    Tenure Range
    8.9% - 9.1% Floating
    Up to 0.5% (min. ₹5750) One time fee
    5L Min
    1-30 Years
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free
    What you'll love
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    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.65% - 8.70% Floating
    0
    15L - 10Crs
    1-30 Years
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.70% - 8.85% Floating
    0.5% (min. ₹11,500) One time fee
    5L - 10Crs
    3-30 Years
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free Paperless Approval Option Available
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.65% - 8.75% Floating
    Up to 0.5% (max. ₹11,500) One time fee
    5L - 10Crs
    1-30 Years
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.70% - 10.05% Floating
    Up to 0.5% One time fee
    2L - 3Crs
    1-30 Years
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.70% - 9.00% Floating
    0.50% (min. ₹11500)
    15L - 5Crs
    1-20 Years (10 yrs plot loan)
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good To Know
    Eligibility Criteria
    8.65% - 11.75% Fixed/Floating
    0.50% (min. ₹10000) One time fee
    5L - 10Crs
    1-30 Years
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Think about
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.7% Floating
    0 One time fee
    40L - 5Crs
    1 - 25 Years
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    12.5% - 17% Fixed/Floating
    2% One time fee
    2L - 1Cr
    1-20 Years
    Response Time Within 30 minutes
    What you'll love
    Documents
    Perks
    Think about
    Fees & Charges
    Good To Know
    Eligibility Criteria
    8.65% - 8.89% Floating
    0 One time fee
    20L - 10Crs
    1-30 Years
    Response Time Within 30 minutes
    Rs.5000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Think about
    Fees & Charges
    Good to Know
    Eligibility Criteria
    10.67% Floating
    1% One time fee
    5L - 5Crs
    1-30 Years
    Response Time Within 30 minutes
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    14% Floating
    2% One time fee
    2 - 25L
    5-25years
    Response Time Within 30 minutes
    What you'll love
    Documents
    Perks
    Think about
    Fees & Charges
    Good to Know
    Eligibility Criteria
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    Current Home Loan Interest Rates:

    Bank Name Home loan interest rates Processing Fee

    Aditya Birla Housing Finance Home loan
    8.65% to 8.89% ₹ 0

    Aspire Home Finance Corporation Limited
    14.00% 2%

    Au Housing Finance
    12.50% to 17% 2%

    Axis Bank Home loan
    8.65% to 11.75% 0.5% (min. ₹10,000)

    DBS Bank
    8.70% ₹ 0

    Dena Bank
    8.60% to 8.85% 0.5%

    Federal Bank
    9.59% to 9.84% 0.5% (min. ₹8,625)

    Gruh Finance Limited
    10.67% 1%

    HDFC LTD Bank Home loan
    8.70% to 8.75% Up to 0.5% (max. ₹11,500)

    ICICI Bank Home loan
    8.70% to 8.85% 0.5% (min. ₹11,500)

    Indiabulls Home loan
    8.70% to 10.05% Up to 0.5%

    India Shelter Finance Home loan
    11.75% 2% to 3%

    Jammu and Kashmir Bank
    8.8% to 9.15% 0.25% (max. of ₹ 10,000)

    Oriental bank of Commerce
    8.60% ₹0

    PNB Housing Finance Limited Home loan
    8.80% - 9.30% Up to 0.50%(min.₹5750)

    Reliance Home Finance Limited Home loan
    9.10% - 9.89% 0.50%

    SBI Home loan
    8.65% to 8.70% ₹ 0

    Sundaram BNP Paribas Home loan
    8.70% - 9.00% 0.50% (min. ₹11500)

    Tata Capital Home loan
    8.65% to 8.85% Up to 0.2%

    Yes Bank Home loan
    10.25% to 10.75% Up to ₹11,500

    Overview:

    A housing loan is one of the most preferred loan instruments to fund the costs involved in fulfilling our housing needs, more so because it offers to pay a large chunk of money involved in procuring a home and lets you payback in installments over a term of your choice. It has been the most preferred route taken by millions in India and abroad to realize their housing dreams. In India, nearly all public sector, commercial and foreign banks offer home loan under their retail lending portfolio. The different types of loans available under this category are as below.

    In a home loan, the most visible component which catches our attention is the interest rate. It is the most decisive factor which helps us in choosing a specific home loan. Let's explore the various facets of this component with a view to help you to avail the most cost effective housing loan in India.

    Home is the basic and the most expensive necessity that a man has to fulfil in his life. With an increase in prices and the reduction in purchasing power, a man cannot accumulate huge funds at a time. So, in order to fulfil its basic necessity, a man has to go for a home loan. As the repayment of home loan comprises of a large portion of interest rates, here we’ll quickly follow up the Home loan interest rates offered by major banks in Home loan segment. Take a quick look below:

    Therefore, these are the Home loan interest rates offered by different banks to its customers. The normal range of Home loan interest rates are from 9.50% to 12.75%. In this race, Government banks along with some private numbers and financial institutions are running in a front panel by offering lowest interest rates on home loans @ 9.50% to 12.75%. The front runners are SBI, ICICI, Standard chartered bank and LIC. SBI and ICICI bank has given a privilege to its women borrowers by providing them a home loan interest rate at 9.35% and 9.40% which is 0.05% lesser than the home loan interest rate provided to the male borrowers. So, women are going to be benefited with this revolution in home loan interest rate and this will encourage women to put a hand for buying her own house.

    BankBazaar facilitates you to compare the home loan interest rates offered by different banks and then to take the most important decision of your life. After comparing the interest rates offered by different banks, you can also calculate your EMI based upon that by just entering few particulars in the EMI calculator provided by the BankBazaar. This calculation will help you decide the loan amount that you can easily pay off and the loan tenure in which you can easily pay off the debt without compromising on your other needy expenses.


    Before going for a home loan, you must be careful enough to see the nature of its interest rates. There are two types of interest rates i.e. fixed interest rates and floating interest rates. You have to carefully choose between the two. Fixed home loan interest rates will remain fixed all over the tenure and floating home loan interest rate will keep on changing with the change in the base rate. But, the floating home loan interest rates are cheaper than the fixed home loan interest rates on the first front.


    So, check and compare your home loan interest rates at BankBazaar and get your dream home at just few simple steps.

    Home Loan Sale

    Types of Home Loan Interest Rates:

    In India, two of the most predominant methods of computing interest charges on the principal amount are as below. Depending in the bank in question, you may be offered both or either of them at the time of availing the loan.

    1. Fixed Rate Home Loans:

      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.

      Advantages 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.
    2. Floating Rate Home Loans:

      As the name suggests, 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: Some banks allow you to switch from fixed to floating or vice versa, after a stipulated time, say 5 years into the loan. Make sure to inquire about switching at the time of availing the loan and opt for it to make the best use of fluctuating rates in your favor.

    Basis for Arriving at 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. For example, the current base rate of Axis Bank is 9.45%. Base rate is published on the official website of the bank.

    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:

    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.

    Factors that Determine Home Loan Interest Rates and eligibility:

    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.

    1. Income: One of the most crucial factors considered by lenders to ascertain the interest rate to be offered on your home loan. The amount of salary drawn at the end or month or revenue figures if self-employed is of much interest to banks. The industry you work and your employer also has a say along with the income factor. A stable and high income, sufficient enough to afford the loan will be rewarded with a pleasing interest rate.
    2. Credit score: Perhaps, the second most crucial determinant of the rates offered on your home loan. 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.
    3. 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.
    4. Loan amount: The proposed loan amount has the ability to influence the rate. The representatives are open to negotiate the rate if you’re willing to get a higher amount of loan. The thumb rule is, higher the loan amount, chances are that you will get a lower rate.
    5. Type of loan: The rates offered also depends on the type of loan you’re availing (see types of loans described earlier in this article). Standard loans such as home purchasing will come at standard rates while its counterparts like home improvement can be charged a higher rate.
    6. Loan tenure: The term 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. Make sure to check with the bank before signing up so that you can benefit from this practice.
    7. Type of interest rate: In furtherance to the content earlier in this write up, 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.
    8. 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.
    9. Ongoing promo offers: Scout for promo offers made by lenders on multiple fronts. Some of these offers are 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.

    How to apply for a home loan?

    There are multiple ways to apply for a home loan. You can do so offline at a designated branch or online, over the internet. It's highly recommended that you compare various loan offers from lenders on a neutral website like bankbazaar, draw conclusions and create an application, all under a single window.

    This website provides you the right kind of resources and information to equip you with knowledge to apply and negotiate a good home loan deal. Bankbazaar has partnered with the likes of leading banks and financial institutions in public and private sector, to bring to you, customized loan deals on the basis of your background.

    Frequently Asked Questions about Home Loan Interest Rate:

    1. I stumbled upon a term called Pre-EMI interest charges in my newly signed home loan contract. Please explain its nature.

      It is the interest applied on the loan amount disbursed by your bank. Such charges are payable every month from the time of disbursement on each release. Pre-EMI interest will continue to be applied until EMI payments start.

    2. Do I get any tax benefits for the interest charges paid on my housing loan?

      Yes, you can claim deduction for the interest charges paid on your home loan under Section 24 of the Income Tax Act. The cap on the tax deduction you can claim on interest paid is Rs.2 lacs for self-occupied property. For a let out property, there is no ceiling prescribed under this section.

    3. Do banks charge for switching over from fixed to floating rate or vice versa?

      Yes, there will be a fee derived on the basis of a percentage of the outstanding loan amount in the account, subject to a minimum amount. For loans with part disbursals, the fee is calculated on the outstanding principal along with the undisbursed value of the loan amount sanctioned.

    4. How does an increase in interest rate affect my repayment? I am currently under the floating rate system.

      With your consent, the bank will make an attempt to increase the loan term to save you from the burden of having to pay additional interest charges. After this change, if the EMI does not cover the interest charges, there will be an increase in the EMI amount. The standard system varies from bank to bank.

    5. Do banks charge for making changes in the EMI amount due to change in the interest rate? My loan is under the floating rate system.

      Generally, there is no charge levied for such changes. However, the amendment is subject to reassessment of your loan repayment history. You may be required to produce additional documents in this regard.

    News About Home Loan Interest Rates

    • Home Loan Rates to be Lowered Very Soon

      The budget is expected to aid banks in cutting rates by 50 to 75 BPS by September so that the impact of demonetisation are offset in the second half of the present year, according to a research note released by BofA-ML (Bank of America Merrill Lynch). Arun Jaitley, the Finance Minister of India, has reduced the fiscal deficit target to 3.2% of GDP for 2017-18, lower than the 3.5% target for 2016-17.

      7th February 2017

    • Realty sector to be boosted by low home loan rates

      Potential home buyers have a reason to rejoice as interest rates are reducing for home loans. As of now, the rate of interest that is prevalent in the market is 8.6% which is the lowest in the last 8 years. The last time rate of interest was lower was between the years 2006 and 2008 when the rate of interest fell to 7.75%. Starting with the State Bank of India, other banks such as Punjab National Bank, IDBI Bank and Union Bank of India have reduced rates.

      Experts also believe that the recent demonetization drive would help increase demand as banks have a lot of funds currently.

      30th January 2017

    • The government approves interest subsidy of 3% on home loans

      The government has recently approved 3% interest subsidy on home loans for up to a maximum of Rs.2 lakh in the rural areas. The National Housing Bank (NHB) will implement this scheme and the government would provide the interest subsidy of 3%. This will ease the EMI burden for the lenders and help the government in achieving the mission of housing for all. This scheme won't be applicable for housing covered under Pradhan Mantri Aawas Yojana (Grameen). The upcoming Union Budget 2017 might bring various positive news that will ease the home loan procedures.

      30th January 2017

    • Competitive cuts in home loan interest rates

      According to the ICRA, a credit rating company, the ongoing cuts in interest rates on home loans will increase competition in the home loan market. The competition will be especially high in the prime salaried segment of the 13-lakh crore market. Though the interest rate cuts are applicable only to new loans, the banks have offered their customers the option to switch their loans from the base rate system to the new MCLR for a minimum fee. State Bank of India was the first lender to cut its lending rate by 50 bps to 8.60%. Following SBI, various other lenders are now offering interest rates ranging from 8.5% to 8.7% compared to their earlier rates of 9.1% to 9.3%.

      16th January 2017

    • Housing Market to get a boost through lower interest rates

      In an effort to fulfil the vision of Housing For All by 2022, the government has taken steps to boost the housing market in the country. The various tax benefits being provided on home loans and the subvention of interest rates by the government will help first time homebuyers access the funds they require more easily. The government has provided an interest rate subvention under the Pradhan Mantri Awas Yojana (PMAY) in an effort to boost the housing market in Tier-3 and Tier-4 cities and allow lower income groups to access housing finance more easily. All these steps aim to boost the overall real estate sector in the country and boost the housing loan to GDP ratio in the country.

      3rd January 2017

    • Banks now offering lower interest rates on Home Loans

      Due to the demonetization of the Rs.500 and Rs.1,000 currency notes, the bank credit sector in India has seen a decline. To spur growth in this sector ICICI Bank and SBI cut their interest rates on home loans. SBI now offers home loans of up to Rs.30 lakh at a fixed interest rate of 8.5% p.a. for the first two years, after which the interest rate will be switched to the Marginal Cost-Based Lending Rate (MCLR). ICICI Bank is offering home loans of up to Rs.75 lakh at an interest rate of 8.65% p.a. to women and 8.70% to men. For loans above Rs.5 crore the present interest rate stands at 8.85% p.a. Other banks taking cue from SBI and ICICI have also made sharp cuts to their MCLR, with Dena Bank reducing its rates by 0.75%, Kotak Mahindra reduced its rates by 0.45% and Bandhan Bank cuts its rates by 1.48%.

      3rd January 2017

    • A cut in lending rates after RBI eases on incremental CRR norm

      Although bond yields rose sharply following RBI’s decision to hold rates, bankers expect interest rates to lower because of excess liquidity in the banks. The withdrawal of the 100% incremental CRR requirement has lowered banking costs. HDFC Bank, Bank of Baroda, Bank of India, Dena Bank, and several others reduced their benchmark lending rates. Interest rates are expected to remain soft as loan demand has decreased due to demonetisation. Post the outcome of the US Fed meeting, and stabilization of the demonetization initiative, there is expected to be a 50 to 75 bps cut in the repo rate in the next budget meeting (Feb 2017). Credit growth remains muted, short-to-medium term rates to remain contained, and yields on short-to-medium term bonds are likely to fall.

      5th January 2017

    • Realty sector letdown by the RBI’s decision to hold rates

      With the RBI’s decision to not cut the repo rate (6.25%), interest rates on home loans and EMI’s will also stay the same. Builders and realty experts expected a reduction in interest rates (25-50 bps) of home loans in order to ease the stress caused by demonetisation. Experts in Mumbai said that RBI’s decision was a disappointment for the realty sector, with the units staying unsold for months. The realty sector has been on a slowdown as builders have hiked prices because of multiple taxes, and premiums. Stringent home loan conditions and high interest rates have put off potential buyers.

      Shishir Baijal, Chairman of Knight Frank, and Anshuman Magazine, Chairman of CBRE, said that a rate cut of 25 bps would have given the realty sector a boost. Dharmesh Jain, President of MCHI, said that the real estate industry needs revitalisation, and a low interest regime will greatly help boost the economy. They are hoping for a major interest rate reduction of 50 bps at the next credit policy review.

      22nd December 2016

    • Interest Rate Cuts Spark Interest Rate War among Lenders

      On Thursday ICICI announced that it will be cutting home loan interest rates by 15 basis points, setting in motion a competitive environment in the home loan market. Loans for up to Rs.75 lakh will see an interest rate cut by 0.15% bringing the interest rate from 9.35% down to 9.20%. This move by ICICI is in light of the recent interest rate cuts by the State Bank of India (SBI), which also offered a 0.15% cut in its interest rate as a festive offer to its customers. SBI has also waived processing fees on home loans for customers who want to buy SBI approved projects and those who want to transfer their home loans to the bank. SBI is the leader in housing finance in India and have a home loan portfolio of Rs.1.97 trillion on 30th June and ICICI had a home loan portfolio of Rs.1.13 trillion till 30th June. During August and September Kotak Mahindra had a special monsoon offer which gave customers with a 9.35% interest rate on their home loans a processing fee waiver. Lenders will be looking to prop up their home loan portfolios this festive season by having special offers on home loans. The largest mortgage lender in the country Housing Development Finance Corporation (HDFC) also announced its reduction in interest rates by 0.15%.

      16th December 2016

    • Low interest rates will lift housing market: Finance Minister

      At the Economist India Summit 2016, Arun Jaitley said that the government is keen on adopting a low interest rate policy to revive the housing market. He mentioned that lower interest rates had boosted the housing market during the regime of ex-PM Atal Bihari Vajpayee’s government.

      He stated that bank rates had once reduced to a level that it seemed profitable to buy a house than rent it out. Also, when inflation is kept under control, interest rates will be streamlined. Jaitley said that he envisions a scenario in which EMI is reasonable and the economy is suitable for the housing market. He also mentioned that the current NDA government has been instrumental in providing affordable housing to the public, under schemes like the Pradhan Mantri Awas Yojana.

      During 1999-2004, the home loan floating rate had reduced to 8%, in line with the sharp cut in the repo rate to 6% in March 2004. However, even after RBI cut the repo rates to 6.5% recently, home loan rates have only come down to 9.4%.

      27th October 2016

    • Low interest rates will lift housing market: Finance Minister

      At the Economist India Summit 2016, Arun Jaitley said that the government is keen on adopting a low interest rate policy to revive the housing market. He mentioned that lower interest rates had boosted the housing market during the regime of ex-PM Atal Bihari Vajpayee’s government.

      He stated that bank rates had once reduced to a level that it seemed profitable to buy a house than rent it out. Also, when inflation is kept under control, interest rates will be streamlined. Jaitley said that he envisions a scenario in which EMI is reasonable and the economy is suitable for the housing market. He also mentioned that the current NDA government has been instrumental in providing affordable housing to the public, under schemes like the Pradhan Mantri Awas Yojana.

      During 1999-2004, the home loan floating rate had reduced to 8%, in line with the sharp cut in the repo rate to 6% in March 2004. However, even after RBI cut the repo rates to 6.5% recently, home loan rates have only come down to 9.4%.

      19th October 2016

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