Home Loan Interest Rates

BankBazaar facilitates you to compare the home loan interest rates offered by different banks to its customers in India and then to take the most important decision of your life. The normal range of Home loan interest rates are from 8.25% to 14.00%.

Home Loan Interest Rate Details
Interest Rate Min. 8.30% - Max. 11.75%
Processing fees Upto 1.00%
Loan Amount Min. 1L to Max. 20 Crs
Loan Tenure Min. 1 Year to Max. 30 Years
Partial pre-payment Charges Nil
Pre-closure Charges Nil
  • Best offers from SBI, BOB, Canara Bank, Aditya Birla, Karnataka Bank, Indiabulls, Axis, HDFC etc.
  • Check Best Offers starting @ 8.30% (SBI)

Compare Home Loan Interest Rates - 19 Jan 2019

Bank Name Rates Processing Fees
PNBHFL Home Loan 9.00% - 9.50% Upto 0.50%
ICICI Bank Home Loan 8.90% - 9.10% Upto 0.25%
ICICI Bank Home Loan (Women) 8.85% - 9.05% Upto 0.25%
Karnataka Bank Home Loan 8.60% - 9.00% Rs. 12,000
HDFC Ltd. Home Loan 8.80% - 9.05% Upto 0.50%
Indiabulls Home Loan 8.75% - 11.0% Upto 0.50%
Sundaram BNP Paribas Home Finance Home Loan 8.90% - 9.55% 0.50% - 1%
Axis Bank Home Loan (Women) 8.80% - 11.75% Upto 0.50%
Axis Bank Home Loan 9.25% Upto 0.50%
DBS Home Loan 9% Rs. 10,000
Kotak Mahindra Bank Home Loan 8.90% Rs. 10,000
Aditya Birla Capital Home Loan 8.55% - 8.99% Upto 1.00%
Indiabulls Home Loan 9.25% - 11.20% Upto 0.50%
Indiabulls Home Loan (Women) 8.70% - 10.95% Upto 0.50%
IDFC Home Loan 8.90% Rs. 5,000
Federal Home Loan 8.60% - 9.20% Rs. 3,000 - 7,500
State Bank of India Home Loan 8.30% - 8.65% Rs. 2,000 - 10,000
Andhra Bank Home Loan 8.75% - 8.85% Upto 0.50%
Dhanalakshmi Bank Home Loan 9.75% - 10.00% Upto 1.00%
Bank Of Baroda Home Loan 8.30% - 9.35% Upto 0.50%
Bank of India Home Loan 8.45% - 8.6% Rs. 1,000 - 20,000
Bank of Maharashtra Home Loan 8.70% - 8.80% -
Canara Bank Home Loan 8.35% - 8.55% Rs. 1,500 - 10,000
Dena Bank Home Loan 8.25% - 8.35% Upto 0.50%
IDBI Bank Home Loan 8.35% - 8.65% -
Indian Overseas Bank Home Loan 8.55% - 9.05% Upto 0.53%
Karur Vysya Bank Home Loan 9.00% Rs. 3,750 - 12,500
South Indian Bank Home Loan 9.10% Rs. 10,000
Tamilnad Mercantile Bank Home Loan 8.95% - 9.20% Upto 0.50%
Central Bank of India Home Loan 8.30% Upto 0.50%
Tata Capital Limited Home Loan 8.75% - 8.85% -
Yes Bank Home Loan 9.35% - 10.50% Upto 0.50%
Jammu And Kashmir Bank Home Loan 8.9% - 9.25% Upto 0.25%
Aavas Financiers Limited Home Loan 10% - 19% Upto 2%
India Shelter Finance Corporation Home Loan 11.75% - 22% 2% - 3%

*GST rates could be applicable depending on banks.

Before going for a home loan, please check below points to see the nature of its interest rates:

  • There are two types of interest rates i.e. fixed interest rates and floating interest rates.
  • Fixed home loan interest rates will remain fixed all over the tenure.
  • Floating home loan interest rate will keep on changing with the change in the base rate.

Note: 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.

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  • Offer Run Date: 1st January 2019 to 31st January 2019.
  • Offer on Home Loan: Get RS. 5000 Amazon gift voucher on disbursal
  • Eligibility Cut-off: All home loan disbursed cases on or before 30th April 2019
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Latest Updates on Home Loan Rate of Interest

State Bank of India slashes Home Loan Interest Rate to 8.30%

  • India’s biggest lending institution, SBI has dropped their housing loan lending rate by 0.5%
  • This could potentially cause other banks to drop their lending rates as well
  • The revised rate of interest was effective from the 1st of November, 2017 and is currently at 8.30% for loans up to Rs.30 lakh
  • This interest rate is the lowest in the industry
  • Housing loan interest rates have dropped by 5 basis points across all loan brackets

Types of Home Loan Interest Rates

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

  1. Fixed Rate Home Loan
  2. Floating Rate Home Loan
Home Loan Interest Rates
Current Home Loan Interest Rates

Fixed Rate Home Loan:

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.

Floating Rate Home Loan:

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.

Important 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 favour.

SBI follows the Marginal Cost of Lending Rate (MCLR) formula to decide the interest rates. Here’s what the current interest rate looks like:
  • For female borrowers, home loan interest rates range between 8.30% to 8.6%.
  • General home loan borrowers need to contend with an interest rate which ranges between 8.35% to 8.65%.
  • Processing fee for an SBI Home Loan is 0.35% with the maximum capped at Rs.10,000 excluding GST.
  • Loan tenure for an SBI Home Loan is 30 years for regular customers, and 25 to 30 years for Flexipay customers.
  • There are no pre-closure charges or part-prepayment charges under an SBI Home Loan.
  • Also, an SBI Home Loan doesn’t require any guarantors.

HDFC Bank has implemented the MCLR formula for its interest rate calculation, where rate changes are seen at a regular time interval. Here’s all the key fees and charges related to HDFC Home Loans:

  • At present, HDFC Bank’s home loan interest rate ranges between 8.80% - 9.05%.
  • Processing fee is 0.50% of the loan amount or Rs.11,800, whichever is lower.
  • Loan tenure for a HDFC Home Loan is between 1 year to 30 years.
  • There are no prepayment or part payment charges on a HDFC Home Loan and it doesn’t require any guarantor for a person to avail the loan.

ICICI Bank has updated its fees and charges for its home loan borrowers. You will find all the key details mentioned below:

  • ICICI Bank has a different interest rate for general and female borrowers. For general borrowers, the interest rate goes from 8.90% - 9.10%.
  • For female borrowers, home loan interest rates range between 8.85% - 9.05% .
  • Processing fee for an ICICI Bank Home Loan will be the lower of 0.50% of the loan amount or Rs.11,800.
  • An ICICI Bank Home Loan comes with a minimum and maximum tenure of 3 years and 30 years respectively.
  • Home loan from ICICI Bank doesn’t come with any prepayment or part-payment charges and neither does it require any guarantor.

Axis Bank, one of the largest private financial institutions in the country, rejigged its home loan interest rate offerings. Here’s what the updated rates look like:

  • The rates go between 8.75% to 10% interest rate for general borrowers.
  • Interest rate for the Super Saver Scheme is set at 9.25%.
  • Processing fees for an Axis Bank Home Loan will either be 0.5% of the loan amount or Rs.10,000, whichever is lower. Note that GST is applicable on the fee as well.
  • For general home loan borrowers, tenure ranges from 1 year to 30 years. For Super Save Scheme loan borrowers, the maximum tenure offered is 20 years.
  • Axis Bank doesn’t charge any prepayment or part-payment penalties on its home loans.
  • No guarantor is required to avail an Axis Bank Home Loan.

PNB Housing Finance released its latest interest rate offering on its Home Loan products. The updated rate is as follows:

  • Interest rates range from 9.0% - 9.50% for all PNB Housing Finance Home Loan borrowers.
  • This is one of the few financial institutions which doesn’t require any processing charges.
  • Loan tenure for a PNB Housing Finance Loan ranges between 1 year to 30 years.
  • A PNB Housing Finance Home Loan doesn’t require any guarantors
  • PNB Housing Finance doesn’t charge any prepayment or part-payment penalties.

Seeing as how several leading banks changed their home loan interest rates, IndiaBulls took updated its lending rates. Here’s what the latest edition looks like:

  • Women borrowers get a slight leeway as interest rates for them ranges between 8.70% - 10.95%.
  • The company’s fixed interest rate home loans come with interest rates between 9.25% - 11.20%.
  • Processing fee for an IndiaBulls Home Loan is up to 0.50% of the borrowed amount.
  • Loan tenure for an IndiaBulls Home Loan ranges from 1 year to 30 years to suit the borrowers’ convenience.
  • IndiaBulls doesn’t charge any prepayment or part-prepayment charges and doesn’t require a guarantor to provide a loan to a customer.

TATA Capital, one of the recent entrants into the home loan market also changed the interest rates recently. The new interest rates are as follows:

  • Interest rates range from 8.75% to 8.85%.
  • Home loan borrowers can choose a maximum tenure of 30 years.
  • Prepayment charge of 2% of the loan amount will be levied on a borrower if he/she choose to close their loan ahead of the term chosen.

Factors to Follow While Applying for a Home Loan

The most important thing that you have look at is the cost of the house and the way you plan to finance it. One of the best ways is to apply for a home loan.

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.

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.

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.

War Over Who Offer Cheaper Home Loan Interest Rates Continue: BoB Joins The Battle

Recently, State Bank of India made it to the news when they dropped their lending rates by 5 basis points. The bank claimed to be offering the cheapest interest rate in the market. However, Bank of Baroda has now has now joined the bandwagon stating that they are offering the lowest interest rate for their best rated customers across various categories, irrespective of the loan amount.

  • The MCLR offered by BoB at this time is 8.3%.
  • BoB also stated that other banks who claim that they offer low interest rate offer such benefit to few categories like women borrower who is availing a loan less than Rs.30 lakhs. If you do not fall within this bracket, you will land up paying higher interest rate. However, BoB offers low interest rates across all categories.

  • If you are planning on buying a home, this is the right time to apply for a home loan and grad the lowest interest rate in the market.
  • You can also check your home loan eligibility using an online eligibility calculator before applying for a home loan.

This will help you negotiate better. While many banks are offering low interest rates on home loans, make sure you compare various home loans and choose a lender who meets your requirements.

RBI Decides to Cut Repo Rate

  • Reserve Bank of India or RBI has decided to cut the repo rate to 6%.
  • They have brought it down by 25 basis points.
  • RBI also intends to further cut rates associated with car loans and home loans.

According to experts in the financial sector, this can prove to be a very good time for the consumers as the EMIs are going to decrease substantially.

This is also the beginning of the festive season. Lenders are going to come up with several festive offers that can help in bringing down the EMIs for the consumers even more Wishfin.com CEO Rishi Mehra stated that the rates associated can come down to 8.2% per annum.

  • The total interest paid by a borrower will also go down due to this decrease in interest rates.
  • Promotional offers in the festive season will be the key factors for attracting new borrowers.

He added that the existing borrowers under MCLR regime will need to wait for the next reset period. However, if the borrowers see that rate charged is more than the present rate, they can switch the loan to a different lender offering a lower rate of interest.

The base rate customers can choose to switch to MCLT regime if they wish to avail the perks of lower rates. Although there is a fee for the switchover, but in the long run, interest will be reduced substantially.

CEO of Bankbazaar, Adhil Shetty stated that the car loan rates and the housing loan rates are going to reduce and this can be a great time for market growth in different sectors. He added that much traction will be visible in markets like automobile, realty and consumer durables with festivals like Eid, Ganesh Chaturthi and Dusshera coming up in the next few months.

RBI Leaves the Repo Rate Unchanged @ 6%, Cuts SLR to 19.5%

Reserve Bank of India’s six member MPC (Monetary Policy Committee) is headed by Urjit Patel. The committee kept the repo rate or short-term lending rate at 6%. The CRR or cash reserve ratio was also not tweaked by the Monetary Policy Committee.

  • The CRR continues to stand at 4%.
  • However, the SLR or statutory liquidity ratio requirement has been cut by 50 bps or basis points.
  • The statutory liquidity ratio now stands at 19.5%.

The real GVP growth projection for FY 2017-2018 has seen a downward revision from 7.3% to 6.7%. The risks have been evenly balanced. The Monetary Policy Committee’s decision has been consistent with unbiased attitude of the policy in accord with the aim of achieving the mid-term target for the CPI (Consumer Price Index) inflation of 4% within a band of 2%, while offering support for the growth.

Dr. Urjit R Patel, Dr. Viral V. Acharya, Dr. Michael Debabrata Patra, Dr. Pami Dua, and Dr. Chetan Ghate voted in favour of monetary policy decision. However, Dr. Ravindra H Dholakia voted for reduction of rate by 25 basis points. The economic activity has gone up globally since the meeting conducted by the MPC in August 2017.

Bank of Baroda cuts Home Loan Rate of Interest to 8.30%

Bank of Baroda has announced that they will be offering cheapest home loans to the A-rated borrowers. Such customers will be allowed to avail home loans at 8.3% MCLR (marginal cost of fund based lending rate).

  • This interest rate does not depend on the amount of loan that the borrower takes
  • Also, the tenure of the loan can go up to 30 years for both self-employed applicants and salaried applicants.

Dena Bank offers Cheapest Home Loan Rate @ 8.25%

  • Dena Bank has decided to offer the cheapest housing loan in the market by offering a rate of 8.25% with their home loans.
  • SBI, early this month, offered a rate of 8.3% with their home loans.
  • This decision of Dena Bank makes their product the cheapest in the market.

A retail loan carnival is being conducted by Dena Bank where the revised home loan rates will be offered. The rates will range between 8.25% and 9%. The carnival has already started and it will go on till the end of this year. According to the bank, this carnival’s objective is to promote the car loans and home loans offered by them. Home loan of up to Rs.75 lakh can be availed at an interest rate of 8.25% from Dena Bank.

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