- Home loan rates have fallen to as low as 6.85% after the RBI cut repo rate by more than 1% in response to COVID-induced disruptions
- Which are those lenders that offer home loans at below 7% interest rate - Let’s find out!
The year 2020 has been unprecedented with things getting unsettled by the disruptions caused due to the ongoing COVID-19 pandemic. On a brighter side, things have been good on the home loan front with interest rates getting eased drastically from what it was at the start of this year. The minimum interest rate was around 7.90%-8.20% at the beginning of 2020. Look where it is now – 6.85%-6.95% per annum. Just goes to show how cheaper home loan interest rates have become. The rates may not have been that low in the last decade or so.
A lot of factors contributed to the sub 7% rate. The economy was not doing well before COVID and got stopped for around 2 months when this pandemic hit India. All that forced the Reserve Bank of India (RBI) to slash the Repo Rate, the rate at which the central bank lends to commercial banks, by 75 basis points on March 27, 2020, and followed it up with another 40 basis point cut in the next monetary policy meeting held 2 months later in May. 100 basis points equal to 1 percentage point. The Repo Rate has now hit an all-time low of 4%, decreasing the cost of funds for banks sharply.
Although RBI’s repo rate has no effect on housing finance companies(HFCs), they have also cut home loan rates much like banks to stay in the competition. So, as a borrower, you have a nice little headache of choosing from these best home loan interest rates. Let’s take a look at the lenders whose home loan rates have come below 7% per annum.
Let’s Begin with State Bank of India
State Bank of India (SBI), the country’s largest lender, has cut the home loan interest rate to as low as 6.95% per annum. Whereas, the overall rate ranges from 6.70%-7.30%. Loans upto INR 30 lakh are given at 6.95% to female borrowers in the salaried segment. Others will have to pay at a slightly higher rate.
What About HDFC Home Loan Interest Rates in COVID Times?
HDFC Limited, the premier mortgage lender in India, offers home loans to borrowers at attractive interest rates ranging from 6.75% - 8.00%. Like SBI, HDFC also provides home loans to salaried women borrowers at 6.95% for loans upto INR 30 lakh. However, if you have a credit score of 780 and above, the rate can be 6.95% irrespective of your gender, profession and the loan amount you apply for.
How Much are ICICI Home Loan Interest Rates?
ICICI Bank is also a formidable force in the home loan segment by offering this credit facility to borrowers at attractive rates. The rate has fallen to as low as 6.95% per annum. On a whole, ICICI Home Loan Interest Rates range from 6.75% - 7.55%. Salaried borrowers can get an interest rate of 6.95% for loans upto INR 35 lakh provided they have a CIBIL score of more than 750.
How Attractive has LIC Home Loan Become in the COVID Era?
LIC Housing Finance is one of the largest housing finance companies in India by disbursing more than INR 3.35 lakh crore since its inception in 1989. Seeing the competition in the home loan space, the veteran housing finance company has lowered the home loan rate to 6.90% for salaried individuals having a CIBIL score of 700. Whereas, the overall home loan interest rate ranges from 6.90% - 7.90%.
At What Interest Rate Do You Get the Bank of India Home Loan?
Like BoB, Bank of India also offers home loans based on the credit score of individuals. So, if you have a credit score of 760 and above, the bank will offer the loan at its benchmark rate of 6.85% per annum like its fellow public lender i.e. BoB. Those having credit scores below 760 will have some additions over the benchmark rate. The overall interest rate is 6.95% - 8.35%.
How Much Cheaper the EMI Has Become in 2020?
The year 2020 still has little more than 5 months to wrap up. But within a space of 7 months or so, the home loan rate has come down by 1% or even more. For example, SBI home loan rates were 7.90%-8.55% at the beginning of this year. Now, it has fallen to 6.70%-7.30%. Similarly, HDFC home loan rates, which were 8%-8.95% at the beginning of this year, have fallen to 6.75% - 8.00%. Likewise, the home loan rates of other lenders have fallen. Considering the recent rate cut, the average home loan rate would be around 6.85%-7.80%. If we compare it with the average rate of 8%-8.80% 7 months ago, how much the per lakh EMI has come down? Let’s find out!
|Loan Amount||Per Lakh EMI @ 8%-8.80%||Per Lakh EMI @ 6.85%-7.80%|
|INR 1,00,000||INR 734 - INR 790||INR 655 - INR 720|
Note – The per lakh EMI is calculated based on a tenure of 30 years, the maximum that you can get in a home loan.