Home Loan Interest Rates

Highlights

  • Check the lowest home loan rates in India.
  • Read the tricks to get the lowest interest rates on home loans.

Getting a home loan at lowest rate is everyone’s desire. But how often do your dreams come true? Well, if you want, you can accomplish any possible thing in this world and a low-interest rate home loan is no big deal.

A home loan can continue for the highest tenure of 30-40 years and it is quite obvious that you (the borrower) wants to pay the lowest rate. The interest rates are offered based on certain factors which you may read in this article. You know that the rates vary from one lender to another and thus comparing the best deals can help you make the right choice.

Here are some of the top banks offering lowest interest rates in India. You can compare the lowest housing loan interest rates and then choose the best home loan.

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Home Loan Interest Rates of Top Banks

Below is the table showing housing loan interest rates available at top banks. You may note that the range is given because the rate of interest depends on many factors which are mentioned later in this article.

BanksInterest Rate (in p.a.)
State Bank of India (SBI)8.35% - 8.90%
ICICI Bank8.35% - 8.85%
Bank of Baroda (BoB)8.40% - 9.40%
Axis Bank8.40% - 8.75%
Citibank8.40% - 9.25%
Kotak Mahindra Bank8.35% - 8.50%
IDBI Bank8.35% - 8.65%
Bajaj Finance8.30% - 8.50%
LIC Housing Finance8.45% - 8.90%
Tata Capital8.75% - 9.05%
HDFC Limited8.40% - 9.35%
Indiabulls Housing Finance8.45% - 9.75%
PNB 8.50% - 8.60%
PNB HFL8.40% - 8.99%
Bank of India (BOI)8.30%

How can you get the lowest interest rate?

The interest rate offered by the bank determines the amount that you will be required to pay in terms of Equated Monthly Installments (EMIs) against your home loan. The interest rates of home loan are both floating and a fixed rate of interest. Generally, people opt for a floating rate of interest since you can get a lower rate. There are certain factors based on which the interest rate is offered. Here is a brief of the parameters that matter when it comes to home loan rates.

  • Property Value- If the property for which you want to take the home loan is in an approved society, colony or area, there are chances that the lender will approve a higher loan amount and a lower rate as well. However, the maximum loan amount offered is 70-90% of the property value. However, some lenders do offer 100% loan.
  • Credit History- A good credit history or record is also important to be eligible for a loan. Thus, it’s important to maintain a good credit history in order to become eligible for a home loan.
  • Relationship with Lender- A good understanding with the bank can go a long way in negotiating a good loan amount at lower rates. Through this way, you can easily avail a high loan amount and that too at competitive rate of interest without any hassle.
  • Monthly Income- Monthly income is one of the most important factors in deciding the eligibility for a home loan. If your monthly income is high, and you are meeting the eligibility criteria, there are chances that you will get a higher home loan. Higher income is helpful in getting the higher amount whether you are salaried or self-employed.
  • Age- This is also an important factor to decide the home loan eligibility. If you are applying for a home loan at an early age, there are chances that you will get a higher loan amount as compared to those who will apply for a loan in their mid 40 or in their 50s. So the early you apply, the more your eligibility will be for a home loan.

How can you calculate Home Loan EMI?

The home loan interest rate calculator or the home loan EMI calculator is used in calculating the home loan EMI online. The tool is simple to use and gives results for EMI, the total amount payable within a few minutes. You just need to mention the basic details of your loan like the interest rate, the total loan amount and the tenure for which you want to check the EMI. The formula used for the calculation is as follows:

EMI=[P x R x (1+R)^N]/[(1+R)^N-1]
Where,

P= Principal Amount
R= Interest Rate
N= Number of Monthly Installments

Latest Update on Home Loan Interest Rates

The home loan applications until April 2016 were linked to the base rate which was arbitrarily decided by the lenders. However, RBI decided to introduce the Marginal Cost of Lending Rate (MCLR) which was linked to the cost of funds. There was still a non-satisfactory response from the borrowers as MCLR was beneficial for only those who had their loan continuing before April 2016 and the older loans were still linked to base rate.

In order to help borrowers have a smoother loan journey, RBI has directed banks to link older home loans to the current MCLR from April 1, 2018.  As a result of which, the home loans linked to base rate will now be automatically linked to MCLR and the borrowers would not have to pay the transfer fees. Top banks such as SBI have no switchover fee, but otherwise the transfer of home loan from base rate to MCLR is a paid service.

You can look at the main components of MCLR calculation below;

  • Operating Expenses
  • Cost of maintaining CRR
  • Marginal Cost of funds
    • After considering interest rates offered on savings / current / term deposit accounts.
    • Based on the cost of borrowings i.e., short-term borrowing rate which is repo rate & also on long-term borrowing rates.
  • Return on Net-worth
  • Tenure Premium (an additional slab of interest over the base rate, based on the loan tenure & commitments).

How can you balance transfer Home Loan?

The balance transfer facility is very beneficial for the customers who have an existing home loan linked to base rate. Post 1 April 2016, base rates have been replaced with Marginal Cost of Lending Rate (MCLR) as per the guidelines issued by RBI. Those who have a home loan linked to base rate, it is beneficial if the loan is transferred to another bank. By doing so, the borrower can save a lot on the loan repayment and lessen the burden of EMI. Almost all banks and NBFCs offer the balance transfer facility and presently some of the banks like SBI are offering the facility without any additional cost. The home loan balance transfer is also available at the same interest rate as a new home loan.

People Also Look For

Personal Loan Interest Rates April 2018
Bajaj Finserv 10.99% - 16.00%
Fullerton India 14.00% - 33.00%
HDFC Bank 10.99% - 20.99%
ICICI Bank 10.99% - 18.40%
IndusInd Bank 10.99% - 16.00%
Kotak Bank 10.99% - 20.99%
RBL 13.00% - 18.00%
Standard Chartered Bank 11.49% - 14.49%
Tata Capital 10.99% - 18.00%
Home Loan Interest Rates April 2018
State Bank of India/SBI 8.35% - 8.90%
HDFC 8.40% - 9.35%
Bank of Baroda 8.30% - 9.30%
LIC Housing 8.45% - 8.90%
PNB Housing Finance 8.40% - 8.99%
ICICI Bank 8.35% - 8.85%
Axis Bank 8.40% - 8.75%
Citibank 8.40% - 9.25%
Indiabulls Housing Finance Limited 8.45% - 9.75%
Kotak Bank 8.35% - 8.50%
EMI Calculator