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

    Compare the lowest home loan interest rate starting from 8.40% p.a. and apply for the best home loan. Get the complete list of current housing loan rates of interest in India from all leading banks and financial institutions.

    Home Loan Interest Rate of all Banks 2023

    Banks Starting Interest Rate (p.a.) Processing Fees
    Kotak Mahindra Bank 8.75% p.a. onwards 2%
    Union Bank of India 8.70% p.a. onwards 0.50% of the loan amount
    Bank of Baroda 8.60% p.a. onwards Up to 0.50% (Min. Rs. 8,500; Max. Rs. 25,000)
    Central Bank of India 8.35% p.a. onwards NIL or up to 0.50%
    Bank of India 8.45% p.a. onwards Up to 0.25% for individuals (Min. Rs. 1,500; Max. Rs. 20,000)
    State Bank of India 8.40% p.a. onwards 0.17%
    HDFC Home Loans 8.45% p.a. onwards* 0.5% or Rs.3,000 whichever is higher
    LIC Housing Finance 8.45% p.a. onwards Up to 0.50%
    Axis Bank 9.00% p.a. onwards Up to 1% or min. Rs. 10,000
    Canara Bank 9.25% p.a. onwards 0.50% of the loan amount (min. Rs. 1,500 and max. Rs. 10,000)
    Punjab and Sind Bank 8.95% p.a. onwards Full Waiver
    IDFC First Bank 8.85% p.a. onwards Up to 3% of the overall loan amount
    Bank of Maharashtra 8.60% p.a. onwards 0.15% of the loan amount subject to a maximum of Rs. 25,000
    Indian Overseas Bank 9.55% p.a. onwards 0.15% of the loan amount subject to a maximum of Rs. 25,000
    Punjab National Bank 8.50% p.a. onwards 0.35% (Max Rs. 15,000)
    UCO Bank 8.75% p.a. onwards 0.5% of loan amount min. Rs. 1500 and max. Rs. 15,000
    IDBI Bank 8.65% p.a. 0.50% (Rs. 2,500 - Rs.5,000)
    HSBC Bank 8.75% p.a. onwards 1% of loan amount or Rs. 10,000, whichever is higher
    Karur Vysya Bank 7.15% p.a. onwards 1% of loan amount or Rs. 10,000, whichever is higher
    Saraswat Bank Home Loan 8.60% p.a. onwards
    • Up to Rs. 35 lakh: Nil
    • Rs. 35 lakh - Rs. 50 lakh: 0.30% of loan amount
    • Rs. 50 lakh - Rs. 70 lakh: 0.40% of loan amount
    • Rs. 70 lakh - Rs. 1.40 lakh: 0.50% of loan amount
    Jammu and Kashmir Bank 8.75% p.a. onwards 0.25% + GST (min. Rs. 5,000 and max. Rs. 50,000)
    South Indian Bank Repo Rate + 3.35% p.a. onwards 0.50% of the loan amount or a minimum of Rs. 5,000 + GST
    PNB Housing Finance Limited 8.75% p.a. onwards Up to 0.50%
    Federal Bank 8.80% p.a. onwards
    • Housing Loan: 0.50% of the loan amount (min. Rs. 3,000 and max. Rs. 7,500)
    • Property Power Loan: 1% of loan amount (min. Rs. 3,000)
    Standard Chartered Bank 8.75% p.a. onwards 1%
    Aavas Financiers Contact the bank 1.00%
    Karnataka Bank 8.75% p.a. onwards Contact the bank
    Sundaram Home Finance 7.85% p.a. Rs.3,000 (for salaried)
    Dhanlaxmi Bank ranges up to 15% p.a. 1% of the loan amount
    Tata Capital 8.60% p.a. onwards 0.50%
    Tamilnad Mercantile Bank 9.35% p.a. onwards 0.50%
    Bandhan Bank 9.15% p.a. onwards Contact the bank
    Yes Bank 9.40% p.a. to 10.25% p.a. 2% of the loan amount plus GST or Rs. 10,000, whichever is higher
    Hudco Home Loan 8.95% p.a. onwards NA
    Indiabulls 8.75% p.a. onwards 0.50% onwards
    Aditya Birla 8.80% p.a. onwards Up to 1%
    GIC Housing Finance 8.80% p.a. onwards 8.80% p.a. onwards
    Reliance Home Finance 9.75% p.a onwards Up to 2%
    Shriram Housing 10.49% p.a. onwards NA
    India Shelter Finance 13.00% p.a. to 20% p.a. 2.00% to 3%
    *Home loan interest rates for all banks updated on 30 Sep 2023

    *All HDFC Home Loans are at the sole discretion of HDFC Home Loans.

    How to Calculate Interest on Home Loan?

    home loan interest rates

    In general, home loans are long-term loans and it is important to figure out your overall interest liability towards the loan in the first place. You can calculate the same using one of the two methods listed below:

    1. EMI Calculator: You can calculate the interest amount applicable to your home loan by simply using a home loan EMI calculator. You will be required to fill up the fields provided on the calculator with the following details –
      • Home Loan Amount
      • Loan Repayment Tenure
      • Rate of Interest
      Once the details have been fed, you can click on the ‘Calculate’ button to get a detailed breakup of your loan including the amount payable towards interest.
    2. EMI Calculation Formula: Alternatively, you can also use the following formula to calculate your EMI liability for your home loan-
      EMI = [P x r x (1+r)^n]/[(1+r)^n-1]
      Wherein, P is the Principal, r is the rate of interest, and n is number of instalments or loan tenure in months.

    How to Calculate the Effective Interest Rate?

    The applicable interest rate on a home loan consists of two components, the base rate and the markup rate. The combination of the 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 rates (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.

    Types of Interest Rates in Home Loan

    There are mainly two types of home loan interest rates charged by most 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 will save money in a the long 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 scenarios, 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.

    Determining Factors for Your Home Loan Interest Rate

    When applying for a home loan, it's important to understand the factors that lenders consider while assessing your eligibility and determining the interest rate. Since home loans involve substantial amounts, banks and Housing Finance Companies (HFCs) conduct a thorough evaluation of your credit history, repayment capacity, income, and property details. It's worth noting that lower interest rates often come with stricter eligibility criteria. Here are the key factors that lenders take into account:

    • Credit Score: Your credit score denotes your credit history and financial track record. A good credit score indicates timely payment of EMIs and credit card bills, as well as responsible credit management. If your credit score, as assessed by CIBIL or other bureaus, is 750 or above, lenders view you more favourably for a home loan. Moreover, banks and HFCs are increasingly using the credit score to determine home loan interest rates. Applicants with higher credit scores, reflecting responsible credit behaviour, may be offered lower interest rates. Those with no or low credit scores can improve their scores by opting for a lifetime free Step-UP Credit Card, which is a secured credit card co-branded with SBM Bank India Ltd.
    • Income and Employment: Lenders take into account factors such as your income, employment type, and employer profile when assessing your home loan eligibility. Applicants with stable employment in government, PSUs, or large/reputed private sector organizations are generally preferred by lenders due to the higher certainty of job and income. Consequently, such applicants may be offered lower home loan interest rates. Conversely, individuals with irregular or insufficient income might face challenges in obtaining a home loan at a lower interest rate.
    • Loan Amount: The amount you intend to borrow for your home loan can also impact the interest rate. Home loans up to Rs. 30 lakh usually have lower interest rates compared to higher loan amounts. Making a lump sum down payment can help reduce the overall loan burden and potentially secure a lower interest rate on your loan.
    • Type of Home Loan: Different types of home loans come with varying interest rates. Regular home loans generally have standard rates, while specialized loans like Plot Loans or NRI Home Loans may have higher interest rates.
    • Interest Rate Concession for Women Borrowers: Some lenders offer a home loan interest rate concession, often around 0.05%, specifically for women borrowers. Therefore, it is advisable for married couples to consider a joint home loan and designate the wife as the primary applicant if it can result in a lower interest rate. Opting for a joint home loan can also increase eligibility and provide additional tax benefits.
    • Type of Interest Rate: The choice of interest rate type for your home loan affects the repayment rate. Fixed-rate home loans maintain consistent EMIs throughout the loan tenure. On the other hand, floating rates, linked to factors like Repo Linked Lending Rate (RLLR), fluctuate with changes in the lending rate. Lenders typically charge higher interest rates for fixed-rate home loans due to the increased interest rate risk involved.

    FAQs on Home Loan Interest Rate

    1. What is the home loan interest rate?

      The Home loan interest rate is the percentage of the principal amount charged by the lender to the borrower for using the principal amount. The interest rate charged by banks and non-financial institutions determine the cost of your home loan. So, when you are paying your home loan EMI (equated monthly instalment), the interest rate charged determines how much you have to pay your lender against your loan every month. Interest rates are usually linked to repo rates and can vary from lender to lender.

    2. Which bank has lowest home loan interest rate?

      Though interest rates offered by banks can increase or decrease as per the banks’ discretion, right now the Bank of Maharashtra is offering the lowest home loan interest of 8.40% p.a. to its customers. However, note that this rate is applicable only on home loan for women applicants.

    3. How to Get Lowest Home Loan Rates in India?

      Home loan interest rates are at a 15-year low, so almost all the banks are offering lower interest rates on home loans compared to what they were offering in the previous financial year. However, to get the lowest home loan interest rates, compare rates offered by lenders. Always use a home loan EMI calculator while comparing rates; it will help you estimate how much you have to pay every month against your loan.

    4. How to reduce home loan interest?

      Choose a shorter tenure – For long term loans, though the EMI is less, the overall cost of the loan drastically increases because you are paying interest for a longer period of time. So, choose shorter tenures as the interest amount will get much lower with time. Use a home loan EMI calculator while comparing long-term and short-term home loans.

    5. How Home Loan Risk weightage is linked to LTV Ratio?

      An LTV or a loan-to-value ratio is the percentage of the property cost that the bank will finance while the rest of the amount is financed by the homebuyer. Most banks finance up to 90% of the property cost. This percentage may vary depending the loan amount. Lenders generally use LTVs to determine how risky the loan is and whether they will approve or deny it.

    6. Which bank has the lowest rate of interest for the self-employed?

      Bank of India and SBI are the banks that are offering attractive interest rates for self-employed professionals and non-professionals, with the rates starting at 6.85% p.a. and 8.05% p.a. respectively.

    7. How can I check total interest payout for my housing loan?

      Use a home loan EMI calculator to check your total interest payout against your loan. Just enter the loan amount, tenure, and interest rate. Upon calculation, you will not only be able to check your EMI, but also a detailed break-up of your repayment schedule through an amortisation table. Through the amortisation table representing your repayment schedule, you can check how much interest you have paid against your loan.


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