Home Loan Interest Rates

Highlights

  • Lowest Home loan interest rates starting at 6.90%* per annum
  • NO prepayment charges on home loans linked to floating rate of interest

To buy a house through a home loan, we prefer the lowest home loan interest rates. Since a housing loan may continue for 30 years, it is quite normal that people look for a lower rate of interest. As a borrower, you can check home loan interest rates of different lenders and then select one.

Having good income and its proof is one of the most important things to get a home loan. Your credit history and credit score is also helpful in getting desired home loan interest rates. Here are the interest rates offered by top banks in India.

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Compare All Banks Home Loan Interest Rates in India October 2020

Below is the table showing the interest rates and processing fee of home loans offered by several lenders.

List of Banks/NBFCsHome Loan Interest RatesProcessing Fees
Allahabad Bank7.15% - 7.50%Up to 0.40% of the loan amount to a max INR 50,000
Andhra Bank6.70% - 7.15%0.50 % of loan amount subject to maximum of INR 10,000 + GST
Axis Bank7.75% - 8.55%Up to 1% of the Loan amount subject to minimum of INR 10,000
Upfront processing fee of INR 2,500 + GST
Bandhan Bank8.50% - 11.75%1% of Loan Amount , Min INR 5,000 + GST
Bank of Baroda7.00% - 8.40%Up to 0.50% of the loan amount or a maximum of INR 7,500 + GST
Bank of India6.85% - 7.75%0.25% of the loan amount + GST
Bank of Maharashtra7.05% - 8.45%As applicable
Canara Bank6.90% - 8.90%0.5% of the loan amount + GST
Central Bank of India6.85% - 7.30%0.50% of the loan amount subject to maximum INR 20,000 + GST
Citibank7.13% - 8.03%Up to 0.40% of the loan amount + GST
Corporation Bank6.70% - 7.15%0.50% of loan amount. Max INR 50,000 + GST
Dena Bank7.00% - 8.40%As applicable
Federal Bank7.90% - 8.05%0.50% of the loan amount to a maximum of INR 7,500 + GST
Fullerton India8.99% - 12.00%3% of the loan amount + GST
HDFC Limited6.90% - 7.65%Up to 0.50% of the loan amount or INR 3,000 whichever is higher, plus applicable taxes.
HSBC7.45% - 7.55%1% of the loan amount + GST
ICICI Bank6.90% - 8.05%Up to 1.00% of the loan amount + GST
IDBI Bank7.40% - 8.40%0.50% of loan amount to a maximum of INR 2,500 + GST
IDFC First Bank11.00%Upto INR 10,000 + GST
IndusInd Bank7.55% - 8.45%INR 10,000 + GST
Indiabulls Housing Finance8.99% Onwards0.50% of the loan amount to a maximum of INR 15,000 + GST
Jammu & Kashmir Bank7.20% - 7.60%0.25% of the loan amount to a maximum of INR 10,000 + GST
Karnataka Bank8.17% - 8.99%0.50% of the loan amount + GST
Karur Vysya Bank8.20% - 10.05%Up to INR 7,500 + GST
Kotak Mahindra Bank7.40% - 9.70%Zero processing fee for online application (Upto 1.25% of Loan amount for offline application)
LIC Housing Finance (LIC HFL)6.90% - 7.90%
  • Loan Amount Upto INR 50 Lakh: - NIL
  • Loan Amount More than INR 50 Lakh to Upto INR 1 Crore - 50% of 0.25% of the loan amount + GST or 50% of INR 10,000 + GST, whichever is lower
  • Loans more than INR 1 Cr to Upto INR 5 Cr - 50% of INR 25000 + GST
Lakshmi Vilas Bank8.55%As applicable
Nainital Bank7.00% - 7.60%As applicable
Oriental Bank of Commerce7.10% - 7.75%0.50% of the loan amount to a maximum of INR 20,000/- + GST
Punjab National Bank (PNB)7.10% - 7.75%0.35% of the loan amount, subject to a minimum and maximum of INR 2,500 and INR 15,000 respectively
PNB Housing Finance (PNBHFL)7.90% - 9.20%INR 10,000 + GST
Punjab & Sind Bank7.30% - 7.65%Up to 0.25% of the loan amount to a maximum of INR 15,000 + GST
Reliance Home Finance8.75% - 14.00%Up to 0.75% of the loan amount + GST
RBL Bank10.30% - 11.65%INR 5,000 - INR 15,000 of the loan amount + GST
State Bank of India (SBI)6.95% - 7.60%0.35 % of loan amount and maximum INR 10,000 +GST
Standard Chartered Bank8.71% OnwardsINR 10,000 + GST
Syndicate Bank6.90% - 8.90%0.125% of loan amount or a maximum of INR 5,000 + GST
Tata Capital9.25% OnwardsAs applicable
UCO Bank7.15% - 7.25%0.5% of the loan amount, to a maximum INR 15,000 + GST
United Bank of India7.10% - 7.75%As applicable
Vijaya Bank7.00% - 8.40%INR 4,000 + GST
YES BANK8.95% - 11.80%0.5% of the loan amount or a maximum of INR 10,000 + GST

Note: As per RBI guidelines, prepayment of home loans linked to floating rate of interest attracts no prepayment charges.

How to Get Lowest Home Loan Interest Rates?

There are certain factors based on which a home loan interest rate is offered which are as follows:

  • Property in a good location – Property in a approved society has more chance of getting loan amount up to 75-90% of the property value.
  • Make use of your good credit score – You must have CIBIL score of 650 or above to get approval for it.
  • Apply at existing bank – A good understanding with the bank help you avail a high loan amount and that too at competitive rate of interest on your home loan without any hassle.
  • High Income – A person earning high income has more chances of getting lower rate and higher amount.
  • Keep all property related documents – It is very important to maintain and keep all the property documents with you as it helps the lender identify your property and its worth properly and thus trust your profile.
  • Make sure you have income proof – Many people do not know that your loan application may be rejected if you do not have a income proof or salary slip. Only a few NBFCs accept such cases but then they give high rates.
  • Apply at young age – If you age at the time of applying is in early 30s or late 20s, you are more eligible for a higher loan amount as you have less financial liabilities.
  • Transfer your home loan to a lower EMI – You can transfer your existing home loan to a lender offering a lower rate on your home loan to save your money.

How to calculate your Home Loan EMI?

A home loan EMI calculator is used for checking monthly installments on a housing loan. You have to mention housing loan interest rate, total loan amount and tenure. The formula used for the calculation is as follows:

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

where,

EMI = Equated Monthly Installment

P = Principal Loan Amount

R = Monthly Interest Rate

N = Number of Monthly Installments

How Can You Make the Most of Lower Home Loan Interest Rates?

If you are eligible for lower interest rates, not only should you grab it at the earliest, but also make sure the loan tenure is optimized to save you more. An optimized tenure means neither too short nor too long. An example below can help you understand it better.

Example – You are earning INR 80,000 (Net) in a month. A lender has come with a loan offer of INR 40 lakh at 7.60% per annum. Now, you are looking for a 20-year deal. But what if you curtail it to 15 years? Let’s check out the table below to know the differences of payment between these two tenure options.

Tenure OptionsEMIInterest Outgo
20 YearsINR 32,469INR 37,92,453
15 YearsINR 37,308INR 27,15,497

So, you can see a savings of around INR 10,76,956 (37,92,453-27,15,497) on reducing the tenure to 15 years instead of continuing it for 20 years. Yes, the EMI will rise by around INR 4,839 (37,308-32,469) when you choose a tenure of 15 years. Despite that, the EMI constitutes below 50% of your net monthly income. The lender can approve such a repayment tenure if you don’t have any other obligation.

Do Lenders Give You the Interest Rate Conversion Facility on a Home Loan?

Home loans are offered at both fixed and floating interest rates. Fixed rate loans come with the same rate of interest throughout the tenure, whereas floating rate loans will see changes in the interest rate as and when changes take place in the market. Even with rate changes, floating rate home loans have lesser interest obligations for borrowers than what could be the case with fixed rate loans. So, if your home loan is on a fixed rate, you can get it converted into a floating rate and save on the interest. However, banks can charge on the conversion. Check out the table below to know the conversion fee applicable to changing from a fixed rate to a floating rate.

LendersConversion Charges
State Bank of India (SBI)INR 5,000
HDFC LimitedAs Applicable
ICICI Bank1.75% of the principal outstanding
LIC Housing Finance (LIC HFL)INR 10,000
Punjab National Bank (PNB)As Applicable
PNB Housing Finance (PNBHFL)0.50% of the principal outstanding
Axis Bank2% on the drawing power
Kotak Mahindra BankAs Applicable
YES BANK0.50% of the principal outstanding

Is the Conversion Allowed Within a Floating Rate Home Loan?

While switching from a fixed rate to a floating rate means considerable benefits for borrowers in terms of interest savings, you can further enhance your savings by switching to the most cost-efficient floating interest rate benchmark. Presently, there are base rate, the marginal cost of lending rate (MCLR) and repo-linked lending rate (RLLR) benchmarks. Of these, the RLLR is an external benchmark and is more transparent to the rate changes made by the Reserve Bank of India (RBI) than the other benchmarks. If you compare well, you’ll find that RLLR-based home loans come with an interest rate lower than the MCLR-based one by at least 0.30%-0.40% on average. So, if you’re in the base rate or MCLR and want to get into an RLLR-based home loan, the conversion fee will apply. Want to see the fee? Check out the table below.

LendersConversion Charges
State Bank of India (SBI)INR 5,000
ICICI BankIf prepayment charges are not applicable, INR 1,000 will be debited
If prepayment charges are applicable, the bank will levy a charge at 0.50% of the principal outstanding
Punjab National Bank (PNB)As Applicable
Bank of BarodaINR 2,000
Axis Bank0.50% on the drawing power, subject to a minimum of INR 10,000
Kotak Mahindra BankAs Applicable
YES BANKNIL

What Should You Do if the RLLR-based Home Loan Rate of Your Bank is Higher than the Prevailing Market Rate?

In case your home loan interest rate despite RLLR is higher than the average market rate, maybe you should do a balance transfer to another lender at a lower rate. The immediate benefit can be in the form of a lower EMI. This will go on to reduce your interest obligation substantially over time, provided the new rate is at least 0.25%-0.50% lower than the existing rate and there’s quite a lot of time left for the loan repayment. The balance transfer will come with a switchover fee, which can be a flat amount or a percentage of the transferred balance. Some lenders can also give you a waiver on the balance transfer fee. However, such offers don’t last forever as they are valid for a specific period. So, if your home loan rate is quite high and you see a lender giving you the balance transfer facility at a lower rate, grab it at the earliest. If that comes with a fee waiver too, you will only gain more from this transaction.

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  • Home Loan Interest Rates October 2020
    Axis Bank7.75% - 8.55%
    Bank of Baroda7.00% - 8.40%
    Citibank8.20%
    HDFC6.90% - 7.65%
    ICICI Bank6.90% - 8.05%
    Indiabulls Housing Finance Limited8.80% - 11.05%
    Kotak Bank7.20% - 9.30%
    LIC Housing6.90% - 7.90%
    Piramal Capital & Housing Finance9.00% - 9.10%
    PNB Housing Finance7.90% - 9.20%
    Reliance Home Finance8.75% - 14.00%
    State Bank of India/SBI6.95% - 7.60%
    Tata Capital9.20% - 9.35%