Compare the lowest interest rates on home loans starting at 6.65% p.a. Apply for the best home loan. Find India’s latest housing loan interest rates from top banks and financial institutions.
Home Loan Interest Rate of all Banks 2022
|Banks||Starting Interest Rate (p.a.)||Processing Fees|
|Kotak Mahindra Bank||7.50% p.a. onwards||0.50%|
|Citibank||6.65% p.a. onwards||Rs. 10,000|
|Union Bank of India||8.25% p.a. onwards||–|
|Bank of Baroda||7.45% p.a. onwards||Contact the bank for information|
|Central Bank of India||7.20% p.a. to 7.65% p.a.||Rs. 20,000|
|Bank of India||7.30% p.a. onwards||–|
|State Bank of India||8.55% p.a. onwards||0.35% onwards|
|HDFC Home Loans||8.60% p.a. onwards*||0.5% or Rs.3,000 whichever is higher|
|LIC Housing Finance||7.55% p.a. onwards||Rs. 10,000 -Rs. 15,000|
|Axis Bank||7.60% p.a. onwards||Rs. 10,000|
|Canara Bank||8.10% p.a. onwards||0.50% of the loan amount|
|Punjab and Sind Bank||7.50% p.a. onwards||Full Waiver|
|IDFC First Bank||7.50% p.a. onwards||Rs. 5,000 – Rs. 5,000|
|Bank of Maharashtra||7.30% p.a. onwards||Rs. 10,000|
|Indian Overseas Bank||7.05% p.a. onwards||0.50% (Max Rs. 20,000)|
|Punjab National Bank||7.40% p.a. onward||0.35% (Max Rs. 15,000)|
|United Bank of India||7.50% p.a. onwards||0.59% (Rs. 1,180 – Rs. 11,800)|
|UCO Bank||7.40%||0.15% (Rs. 1,500 – Rs. 15,000)|
|DBS Bank||7.30%||0.25% (Rs. 10,000)|
|IDBI Bank||7.60%||0.50% (Rs. 2,500 – Rs.5,000)|
|HSBC Bank||7.35%||1% (Rs. 10,000)|
|Karur Vysya Bank||8.05%||Rs. 5,000|
|Saraswat Bank Home Loan||7.50% p.a. onwards||Nil|
|Jammu and Kashmir Bank||7.85%||Rs. 500 – Rs. 10,000|
|South Indian Bank||Repo Rate + 3.35% p.a. onwards||0.50% (Rs. 5,000 – Rs. 10,000)|
|PNB Housing Finance Limited||8.75% p.a. onwards||Up to 0.50%|
|Federal Bank||8.55% p.a. onwards||Rs. 3,000 – Rs. 7,500|
|Standard Chartered Bank||7.25% p.a. onwards||1%|
|Karnataka Bank||7.89% p.a. onwards||Rs. 250|
|Sundaram Home Finance||6.95%||Rs.3,000 (for salaried)|
|Dhanlaxmi Bank||8.35% p.a. onwards||Rs. 10,000|
|Tata Capital||7.75% p.a. onwards||0.50%|
|Tamilnad Mercantile Bank||7.95%||Rs. 15,000|
|DHFL Housing Finance||8.75%||Rs. 2500|
|Bandhan Bank||7.30% p.a. onwards||1% (Rs.5,000)|
|Yes Bank||8.95%||1% (Rs. 10,000)|
|Hudco Home Loan||9.25%||NA|
|Aditya Birla||8.00% p.a. onwards||1%|
|GIC Housing Finance||8.20%||Rs. 2,500|
|Reliance Home Finance||9.75%||Rs. 3,000 – Rs. 6,500|
|India Shelter Finance||13.00%||2.00%|
*All banks have updated the home loan interest rates on December 14, 2022
*All HDFC home loans are at HDFC Home Loans’ sole discretion.
How to Calculate Interest on Home Loan?
Home loans are generally long-term loans. Therefore, calculating your total interest liability for the loan is important. The following two methods can be used to calculate this figure:
- EMI Calculator uses a calculator to calculate the interest rate applicable to your home loan. Calculator for EMIs on a home loan. Fill in the fields on the calculator with these details:
- Home Loan Amount
- Loan Repayment Tenure
- Rate of interest
After you have provided the information, click the “Calculate” button to view a breakdown of your loan and the amount due towards interest.
- EMI Calculation Formula You can also use this formula to calculate your EMI liability on your home loan:
EMI = [Px rx (1+r),n ]/[(1+r),n-1]
Here, P is the principal, r is the interest rate, and n is the number of installments or loans tenures in months.
How to Calculate the Effective Interest Rate?
Two components make up the applicable interest rate for a home loan: the markup rate and the base rate. The loan amount will be paid in the sum of these two components. These components will help you to understand the loan.
- Base rate: This is the bank’s standard lending rate, which applies to all retail loans. This rate can be subject to frequent adjustments based on multiple inputs.
- Markup:This small percentage is added on to the base rate to calculate the EIR (Effective Interest Rate) for a particular type of home loan. It varies from one type to the next.
Effective interest rate (EIR) = Basis Rate + Markup
- The Reserve Bank of India (RBI), has established a new way to calculate the lending rate. This replaces the current base rate system. The Marginal Costs of Funds based Lending Rate (MCLR), is designed to improve transparency and flexibility in the publication of rates by Indian banks and financial institutions. The RBI requires banks to fix the interest rates after analyzing the risk factors associated with lending to borrowers. It considers various factors such as deposits, repo rate and deposits. The MCLR-based calculation is slightly lower than the base rate.
Types of Interest Rates in Home Loan
Most banks charge two types of interest on home loans:
1. Fixed Interest Rate
This calculation system ensures that the interest rate will not change over the loan term. The interest rates will not change as the rate is fixed. Depending on the offer, you may be allowed to switch to the floating rate system.
- Advantage: Because the rate is fixed, you will know upfront how much interest you are paying. You will have a loan that is protected from rate fluctuations, and you’ll be able to save money over time if interest rates rise.
- Disadvantage: The interest component will remain frozen, so you don’t lose your standard lending rate.
2. Floating Interest Rate
Your home loan interest rates are subject to the most current lending rates at the bank. The published rate of the bank is used to determine the rate. This rate can change depending on many factors, including the RBI’s monetary policy and revisions to lending rates, bank response to modifications, etc.
- The Advantage: One of the most obvious benefits of choosing the floating rate is that you will be charged based on the current rate. You save interest on rates that fall.
- Disadvantage: In some rare cases, when standard rates rise, the borrower must bear the burden of being charged a higher rate.
Note: The floating home loan interest rate is cheaper than the fixed interest rates on the first front.
Factors that Determine Home Loan Interest Rate
Your income and background can significantly impact the rate you receive from the bank. Let’s look at the most critical factors that can help you get the best rate.
- Income: Your industry and employer have a say in the income factor. You will get a lower interest rate if you have a stable income to pay the loan.
- Credit Score: The process of applying involves an extensive review of your credit reports. This includes checking your credit history and current credit. You will likely get a competitive rate if you have a strong credit history and are current with your payments. You can also negotiate a great deal if you have a strong credit history.
- Property’s location: It is also essential to consider the surrounding area. A prime location or a trust builder/agency indicates a property’s value and can lead to a favorable interest rate.
- Loan amount: Your proposed loan amount can impact the rate. A rule of thumb is that a higher loan amount will result in a lower rate.
- Types of Loans: Rates will vary depending on which home loans you are availing. Standard loans, like those for home purchases, will be charged at standard rates, while home improvement loans can be charged at a higher rate.
- Loan Terms: Your loan term will impact the interest rate offered by the bank. There is a good chance that the interest rate offered will be lower if you choose a more extended period.
- Types of Interest Rates: The interest rates on your home loan are affected by the “Fixed” or “Floating” rate you choose. The fixed rate is slightly lower than its counterpart.
- Employment Type: Salaried applicants will likely get a slightly lower rate than the self-employed due to the risk involved. There are different rates for self-employed and salaried applicants at banks.
- Ongoing Promo offers: Keep an eye out for promotions made by lenders across multiple fronts. Some may be made at the local level, while others at the national level. Lenders will work with various partners, such as builders and aggregators, to provide tailor-made deals that include competitive rates.
Things to Know Before Taking Home Loan
It would be best if you considered the cost of your house and how you intend to finance it. Many Indian banks offer home loans at very affordable interest rates. These rules will help you decide which scheme to apply if you’re unsure.
- Compare Interest rates: Do not rush to apply for a home loan with the lowest interest rate. You should carefully read the terms and conditions of the scheme to determine why it is so low compared to other home loans. Experts recommend comparing interest rates for different house loan programs before applying.
- Review the History of the Lender Before you apply for a loan to your home from a bank or any other lender; you should review its history. Untrusted or unknown lenders can make loans a liability that could lead to financial disaster. Look online for information about different lenders, check their history, and read reviews about their products and services. You can contact experts or mortgage brokers to find out more about any lender.
- Make a down payment. When applying for a house loan, ensure you have enough money. Don’t be lured by programs that don’t require a down payment. You might pay more interest if you don’t pay any down payment when applying for a home mortgage. You will also be able to repay your loan sooner if you have a higher down payment.
- The Fine Print It is essential to read all the fine print before applying for a loan. Although it may seem long and tedious, you will be able to avoid future surprises by reading the fine print. You will find all information, terms and conditions regarding the loan you are applying for in the fine print. Ask a Chartered Accountant if you have difficulty understanding the terms and conditions in the document.
- Understand the charges. There are many fees associated with a home loan, including late payment fees and prepayment fees. Legal expenses and documentation charges may also apply. All prices should be known. Ask your lender for a written list of all costs.
- These are just a few of the many rules you need to follow when applying for a loan. It would be best if you also learned about the tax advantages on your home loan and how to claim them. After you have received your home loan, you must pay the EMI every month.