A "low interest" loan shouldn't mean you have very little interest in paying it back!
I'm interested!
  • Custom Free
     

    Custom quote

    • Home Loan Interest Rates

    Icon for Home Loan Eligibility
    Click here to
    Check your Eligibility!

    Compare the lowest home loan interest rates starting from 7.90% 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 all Banks 2020

    Banks Interest Rates Processing Fees
    State Bank of India 7.90% - 8.55% p.a. Rs.2,000 – Rs.10,000
    HDFC Ltd. 8% - 8.30% p.a Up to 0.50%
    ICICI Bank 8.60% - 9.40% p.a. 0.50% to 1%
    Axis Bank 8.55% - 9.40% p.a Up to 1%
    Bank of Baroda 8.15% - 9.15% p.a. 0.25% to 0.50%
    PNB Housing Finance Ltd. 7.95% - 8.70% p.a. Up to 1%
    LIC Housing Finance Limited 8.40% - 8.50% p.a. Rs. 10,000- Rs.15,000
    (+Service Tax)
    Karnataka Bank 8.65% - 10.25% p.a. 0.50% to 2.00%
    United Bank of India 8.00%- 8.15% p.a. Rs.1000/ or Above
    Vijaya Bank 8.10% - 9.10% p.a. 0.50 % or Max Rs. 20,000/-
    Standard Chartered Bank 9.26% p.a. onwards Upto 1.00%
    UCO Bank 8.05% to 8.60% p.a. 0.50%
    Citibank 8.05% - 9.60% p.a. Rs.10,000
    HSBC Bank 8.55% - 8.65% p.a. Rs.10,000 or 1% of Loan Amount
    Bandhan Bank 8.75% - 14.50% p.a. 1% of Loan Amount
    Oriental Bank 8.25% - 8.80% p.a. 0.50% of the Loan Amount
    Sundaram BNP Paribas Home Finance 8.55% - 9.25% p.a. 0.50% - 1%
    (min. Rs.2,000; max. Rs.20,000)
    Kotak Mahindra Bank 8.60% - 9.40% p.a. up to Rs.10,000
    DBS Bank 8.45% - 8.95% p.a. upto Rs.10,000
    Aditya Birla Capital Housing Finance 9.00% – 12.50% p.a. upto 1% on loan amount
    Indiabulls Housing Finance 8.99% p.a. max. 1% on loan
    IDFC First Bank 8.00% – 14.00% p.a. Rs.10,000
    Canara Bank 8.05% - 10.05% p.a. 0.50%
    (Max. Rs.10,000)
    Federal Bank 8.55% - 8.70% p.a. 0.5%
    (Max Rs 7500)
    Andhra Bank 8.15% - 9.20% p.a. 0.50%
    (max. Rs.10,000)
    Dhanalakshmi Bank 9.55% - 10.25% p.a. 1%
    Bank of India 8.10% - 8.40% p.a. 0.25%
    (Max. Rs.20,000)
    Bank of Maharashtra 8.55% – 9.00% p.a. 0.25%
    IDBI Bank 8.25% - 8.80% p.a. 0.50%
    Indian Overseas Bank 8.20% - 10.95% p.a. 0.50%
    Karur Vysya Bank 8.65% - 12.50% p.a. Rs.2,500 - Rs.7,500
    South Indian Bank 9.00% p.a. onwards 0.50%
    (Max. Rs.10,000)
    Tamilnad Mercantile Bank 9.10% p.a. 2% or Rs.15,000/-
    Central Bank of India 8.00% - 8.55% p.a. 1%
    (or Min. Rs.10,000)
    Tata Capital 9.25% p.a. 2%
    Yes Bank 9.78% - 10.68% p.a. Up to 2%
    Jammu and Kashmir Bank 8.65% - 8.95% p.a. 2% - 3%
    Aavas Financiers 10% - 19% p.a. Up to 2% plus GST
    Indian Shelter Finance Corporation 16% p.a. Up to 3%
    DHFL Housing Finance 9.75% p.a. onwards Rs 2500/-
    (+ GST+ document charges)

    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.
    Apply for Home Loan

    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

    • 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 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

    • 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%.

      7th Feb 2020

    • Reserve Bank of India Governor decides to keep repo rate the same at 5.15%

      The Governor of the Reserve Bank of India, Shaktikanta Das chaired the monetary policy committee and maintained the status of the policy rates of 5.15%. This was the fifth bi-monthly monetary policy review of the financial year.

      The halt in repo rate was decided after 5 consecutive repo rate cuts. The short-term lending rate or repo rate was kept steady at 5.15% as all six committee members voted against the rate cut. The Central Bank of India had raised its October-March CPI projection from 4.7% to 5.1% as FY20 real GDP growth projection was cut from 6.1% to 5%.

      9 December 2019

    • Rate of interest on home loans may reduce below 8% soon

      In the upcoming policy review that is scheduled on 5 December 2019, the Reserve Bank of India (RBI) is expected to reduce the repo rate by 25 basis points. The reduction of repo rates will see home loan interest rates fall below 8%.

      Most banks in India have launched home loans that are linked to RBI’s repo rate. Any reduction in repo rates will see home loans interest rates fall below 8%. According to The Times of India poll, many economists expect the repo rate to be cut by 25 basis points by the RBI. The reduction in repo rates will see it touch 4.90%. The External Benchmark Rate (EBR) set by the State Bank of India (SBI) is 8.05%. The reduction in repo rates by 25 basis points will see the rate of interest fall to 7.80%. The applicable interest rates will start at 7.95%. According to the governor of RBI, Shaktikanta Das, the central bank will keep the repo rates soft in order to revive the economy. According to several economists, there are reasons for the RBI to maintain the policy accommodative after the GDP fell a low of 4.5% in the second quarter. According to an economist of Deloitte India, Rumki Majumdar, since the inflation is low, there is room for the RBI to reduce interest rates. He further added that the interest rates are highly anticipated to be cut in the December meeting.

      3 December 2019

    • RBI may reduce repo rates by 25 bps

      According to a Reuters’ poll, the interest rates are expected to be cut by the Reserve Bank of India (RBI) in the December bi-monthly monetary. The prices are expected to be cut again before July.

      However, according to various economists, the rate cuts are expected to have little or no impact on the economy. According to a Reuters’ prediction, RBI is expected to cut the interest rates by around 25 basis points in the December 3-5 meeting. The year, the interest rates have been cut 5 times so far. The next cut would be the longest of consecutive rate cuts in 20 years. If the interest rates are reduced by 25 bps, it would touch 160 bps for the year, which is the most since 2009. Another rate cut of about 15 basis points is expected to be completed by the second quarter of 2020. So far this year, the RBI has reduced the interest rates by 135 basis points. However, as per historical standards, inflation has been low. The expansion of the Indian economy in the first quarter of 2019-2020 has been 5.0%. It is the lowest since 2013. According to various business surveys, the economy is not expected to improve in the short-term.

      28 Nov 2019

    • Home loan interest Rates may Vary Depending on the CIBIL Score

      Since banks have linked their lending rates to the Reserve Bank of India’s (RBI) repo rate, the interest rates have reduced significantly. However, certain public sector banks have started checking the credit-score of borrowers before determining the interest rate.

      According to a report from the Economic Times, Syndicate Bank, Union Bank of India, and Bank of Baroda have started distinguishing retail loans based on subprime and prime exposure. According to the report, Bank of Baroda will use the CIBIL score of the individual to determine the home loan interest rate. Individuals who have a credit score ranging between 675 and 724 will have to pay a 1% more interest rate than individuals who have a credit score of above 760. Banks will not offer home loans to individuals who have a credit score of less than 675. The home loan interest rates offered by Bank of Baroda for individuals having a credit score ranging between 675 and 724 is 9.1% p.a. In case the individual has a credit score of above 760, the interest rate will be 8.1%. In case the credit score of the individual ranges between 725 and 759, the rate of interest for new home loans will be 8.35%. An extra 10 basis points will also be charges by Union Bank of India in case the credit score of the individual is below 700. All three banks have also clarified that they will use the credit score that is provided by CIBIL.

      11 October 2019

    • New Home Loan Applicants to Benefit from Rate Cut

      New home loan applicants will benefit from the recent RBI interest rate cut, as their interest rates could come down by as much as 25 basis points. With home loans linked to external benchmarks and most banks opting to use the RBI’s repo rate as their benchmark, any change in this rate wold be passed on to borrowers.

      Existing borrowers who have MCLR-linked interest rates can also take advantage of the new rates by switching to the new regime. Some banks are charging a fee (administrative charge) for this migration. The only catch is banks can levy a risk premium charge on borrowers who have weak credit scores, as a way to mitigate their risk of possible defaults. However, borrowers who migrate from the MCLR-linked rate to the repo rate-based interest rate cannot migrate back since MCLR-based rates will not exist henceforth.

      11 October 2019

    • House Building Advance Rate Reduced to 7.9% by the Government

      The House Building Advance (HBA) interest rate was reduced by the Ministry of Housing & Urban Affairs on 3 October 2019 from 8.5% to 7.9% for one year. The interest rate has been reduced irrespective of the HBA loan amount. The new interest rate will be effective from 1 October 2019. The Finance Minister, Nirmala Sitharaman, said in September 2019 that the interest rate would be reduced on 10-years government securities yields and HBA in order to help government servants buy homes. HBA is provided for state and central government employees so that they can construct a house on a plot that is owned by them or jointly owned with the spouse. HBA can also be allowed in case individuals wish to buy a new flat or house. HBA can be availed by temporary and permanent employees who have provided continuous service for at least 5 years. According to the rules, HBA is sanctioned to employees by ministries or departments. The main aim of HBA to central government employees is to provide welfare measure assistant to buy or construct flats or houses of their own.

      8 October 2019

    • Bank Lending Rates to be Linked with External Benchmarks

      Bank lending rates will now be linked to external benchmarks according to the decision taken by the Reserve Bank of India (RBI. The central bank is also examining the possibility of the Non-Banking Financial Companies (NBFCs) linking the lending rates to the external benchmarks. The RBI had previously made it compulsory for banks to link all the new floating rate loan products to the micro and small enterprises (MSMEs) to an external interest rate benchmark from 1 October 2019. Home loans, car loans, and other loan for personal consumption were also mandated to link their interest rates to the benchmark repo rate of the RBI. The benchmark to be linked to could either be the 3-month or 6-month treasury yield that will be published by Financial Benchmarks India Pvt. Ltd., or any other FIBIL-published report. The plan was supposed to take effect on 1 April 2019 but had faced a delay due to the requests made my banks to give them more time to adapt to the new regime. The RBI is also looking at extending the linkage of external benchmarks with interest rates, to the NBFCs.

      25 September 2019

      

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

    reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.