A "low interest" loan shouldn't mean you have very little interest in paying it back!
Compare the lowest home loan interest rates starting from 8.25% 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.
| Banks | Interest Rates | Processing Fees |
| State Bank of India | 8.20% - 11.60% p.a. | Rs.2,000 – Rs.10,000 |
| HDFC Ltd. | 8.25% - 9.60% p.a. | Up to 0.50% |
| ICICI Bank | 8.65% - 9.40% p.a. | 0.50% to 1% |
| Axis Bank | 8.90% - 12.45% p.a. | Up to 1% |
| Bank of Baroda | 9.15% p.a. onwards | 0.25% to 0.50% |
| PNB Housing Finance Ltd. | 9.25% - 11.50% p.a. | Up to 1% |
| Karnataka Bank | 8.65% - 14.30% p.a. | Rs.12,000 |
| 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 | 8.90% - 9.25% p.a. | up to Rs.10,000 |
| DBS Bank | 9.35% – 11.95% p.a. | upto Rs.10,000 |
| Aditya Birla Capital Housing Finance | 9.00% – 12.50% p.a. | upto 1% on loan amount |
| LIC Housing Finance Limited | 8.95% - 9.05%p.a. | Rs. 10,000- Rs.15,000 (+Service Tax) |
| Indiabulls Housing Finance | 8.80% - 12% p.a. | max. 1% on loan |
| IDFC First Bank | 8.00% – 14.00% p.a. | Rs.10,000 |
| Canara Bank | 8.50% – 9.50% p.a. | 0.50% (Max. Rs.10,000) |
| Federal Bank | 8.90% - 9.10% p.a. | 0.5% (Max Rs 7500) |
| Andhra Bank | 8.55% - 9.65% p.a. | 0.50% (max. Rs.10,000) |
| Dhanalakshmi Bank | 9.80% p.a. onwards | 1% |
| Bank of India | 8.50% - 8.55% p.a. | 0.25% (Max. Rs.20,000) |
| Bank of Maharashtra | 8.55% – 9.00% p.a. | 0.25% |
| IDBI Bank | 8.30% - 9.30% p.a. | 0.50% |
| Indian Overseas Bank | 8.50% - 11.20% p.a. | 0.50% |
| Karur Vysya Bank | 8.80% - 12.45% p.a. | Rs.2,500 - Rs.7,500 |
| South Indian Bank | 9.10% - 10.45% p.a. | 0.50% (Max. Rs.10,000) |
| Tamilnad Mercantile Bank | 9.20% p.a. | 2% or Rs.15,000/- |
| Central Bank of India | 8.55% p.a. | 1% (or Min. Rs.10,000) |
| Tata Capital | 9.25% p.a. | 2% |
| Yes Bank | 9.85% - 12% 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) |
There are mainly two types of home loan interest rates charged by most of the banks.
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.
Read More: Fixed Home Loan Rates
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.
Note: But, the floating home loan interest rates are cheaper than the fixed home loan interest rates on the first front.
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.
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.
Effective Interest Rate (EIR) = Base Rate + Markup
This MCLR based computation works out to be slightly lower than the erstwhile base rate.
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:
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.
11th October 2019
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.
11th October 2019
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.
8th October 2019
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
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