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What is the Best Credit Score to Buy a House?

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Highlights

  • Eyeing a home loan at the best interest rate? A good credit score will help you get so!
  • Read here the credit score you need to get the best home loan deal

The importance of credit score is somewhat less when it comes to getting a home loan. As this loan comes against the mortgage of the property, lenders can recover the pending dues by selling the house if you default on loan payments for 6-7 months in a row. So, you may not face problems in approval if your credit score is not good. That said, the credit score will play a critical role in helping lenders decide the home loan interest rate. These days you could see lenders offering home loans at below 7% to individuals with a good score of 750 and above.

A lower interest rate brings down the home loan liability considerably over time. In a home loan, an interest rate difference of even 0.25-1% can bring a difference of INR 2-3 lakh in the overall interest obligation. The difference could be even more. This is where a good credit score can come in handy for you. As far as the best score for buying a house goes, it could vary from one lender to another. We will elaborate on the same here. Let’s read further to know the same.

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Let’s Check the Best Credit Score for a Home Loan

Of late, many lenders have started setting home loan interest rates based on credit score besides the loan amount and profession of individuals. Let’s discuss the interest rate offer of lenders one after another.

Best LIC Home Loan Interest Rate Based on a Credit Score

LIC Housing Finance offers the best home loan interest rate to individuals with a credit score of 700 and above. With this score, you can get a home loan at an interest rate of 6.90-7.30% across different loan amounts upto INR 15 Crores. If you have a poor score of 600 and less, the rate could be as high as 7.60-7.90% per annum.

What is the Best Credit Score for Taking a Home Loan from PNB Housing Finance?

PNB Housing Finance offers home loans based on the credit score and profession of individuals. The best credit score for taking a home loan from this housing finance company is 800 and above. If you have such a score, the interest rate will be as low as 7.50-7.95% per annum. Else if you have a score of 650 and below, the score will rise to 8.80-9% for salaried and 9-9.20% for self-employed.

What is the Lowest Bank of Baroda Home Loan Interest Rate Based on Your Credit Score?

Bank of Baroda (BoB) home loan interest rates are based purely on the credit score of individuals. People with a credit score of 775 and above can get the loan at an interest rate of 6.85% per annum, which is the benchmark rate for BoB. Usually, the interest rate is an addition of some points over the benchmark rate. Whereas if you have a score of less than 650, the rate can go as high as 8.25%.

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How Much will Bank of India Offer to Most Creditworthy Individuals?

Bank of India (BOI) offers home loans at an interest rate of 6.85% to individuals with a  score of 760 and above. Whereas the rate can be as high as 7.15% for salaried and 7.75% for self-employed with a credit score of 724 and below.

How Does Union Bank of India Set Home Loan Interest Rates?

Union Bank of India sets home loan interest rates based on the credit score, loan amount and the profession of individuals. The bank can offer an interest rate of as low as 6.80-6.90% for salaried and 6.85-7.00% for self-employed on having a credit score of 700 and above. While the maximum rate of 6.90-7.00% and 6.95-7.05% will apply to salaried and self-employed, respectively. Compared to when the score falls below 600, the lowest rate for salaried and self-employed can be 7.10-7.25% and 7.20-7.35%, respectively. Whereas the maximum rate remains 7.25-7.35% for salaried and 7.30-7.40% for self-employed.

What About Other Lenders?

They also consider credit score to set home loan interest rates, but they may not specify it. Only when you apply for a home loan there do you get the credit score-based rates. The rate at other lenders remains around the one you have seen above.

The Bottom Line

As you have seen the importance of credit score in determining your home loan interest rate, you should pay your existing loan or credit card dues on time. It will ensure a good  score and the best home loan deal for you. All that will only make you feel good when paying the home loan EMI.

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Personal Loan Interest Rates December 2020
Fullerton India14.00% - 24.00%
HDFC Bank10.75% - 21.45%
ICICI Bank10.75% - 17.50%
IndusInd Bank11.00% - 23.00%
Kotak Bank10.99% - 20.99%
RBL17.50% - 26.00%
Standard Chartered Bank11.00% - 15.00%
Tata Capital10.99% - 19.75%
Home Loan Interest Rates December 2020
Axis Bank7.75% - 8.55%
Bank of Baroda6.85% - 8.25%
Citibank7.13% - 8.03%
HDFC6.90% - 7.65%
ICICI Bank6.90% - 8.05%
Indiabulls Housing Finance Limited8.99%
Kotak Bank6.75% - 8.45%
LIC Housing6.90% - 7.90%
Piramal Capital & Housing Finance9.65%
PNB Housing Finance7.50% - 9.20%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI6.95% - 7.60%
Tata Capital7.50% - 8.75%