Home Loan Interest Rate

Explore Home Loan Interest Rates 

Discover the lowest home loan interest rates, starting at just 8.40% per annum, and secure the ideal home loan for your needs. Access a comprehensive list of the current interest rates for housing loans in India, offered by top banks and financial institutions.
 

2023 Home Loan Interest Rates Across All Banks

Banks Starting Interest Rate (p.a.) Processing Fees

Kotak Mahindra Bank

8.75% p.a. onwards

2%

Union Bank of India

8.70% p.a. onwards

0.50% of the loan amount

Bank of Baroda

8.60% p.a. onwards

Up to 0.50% (Min. Rs. 8,500; Max. Rs. 25,000)

Central Bank of India

8.35% p.a. onwards

NIL or up to 0.50%

Bank of India

8.45% p.a. onwards

Up to 0.25% for individuals (Min. Rs. 1,500; Max. Rs. 20,000)

State Bank of India

8.40% p.a. onwards

0.17%

HDFC Home Loans

8.45% p.a. onwards*

0.5% or Rs.3,000 whichever is higher

LIC Housing Finance

8.45% p.a. onwards

Up to 0.50%

Axis Bank

9.00% p.a. onwards

Up to 1% or min. Rs. 10,000

Canara Bank

9.25% p.a. onwards

0.50% of the loan amount (min. Rs. 1,500 and max. Rs. 10,000)

Punjab and Sind Bank

8.95% p.a. onwards

Full Waiver

IDFC First Bank

8.85% p.a. onwards

Up to 3% of the overall loan amount

Bank of Maharashtra

8.60% p.a. onwards

0.15% of the loan amount subject to a maximum of Rs. 25,000

Indian Overseas Bank

9.55% p.a. onwards

0.15% of the loan amount subject to a maximum of Rs. 25,000

Punjab National Bank

8.50% p.a. onwards

0.35% (Max Rs. 15,000)

UCO Bank

8.75% p.a. onwards

0.5% of loan amount min. Rs. 1500 and max. Rs. 15,000

IDBI Bank

8.65% p.a.

0.50% (Rs. 2,500 - Rs.5,000)

HSBC Bank

8.75% p.a. onwards

1% of loan amount or Rs. 10,000, whichever is higher

Karur Vysya Bank

7.15% p.a. onwards

1% of loan amount or Rs. 10,000, whichever is higher

Saraswat Bank Home Loan

8.60% p.a. onwards

Up to Rs. 35 lakh: NilRs. 35 lakh - Rs. 50 lakh: 0.30% of loan amountRs. 50 lakh - Rs. 70 lakh: 0.40% of loan amountRs. 70 lakh - Rs. 1.40 lakh: 0.50% of loan amount

Jammu and Kashmir Bank

8.75% p.a. onwards

0.25% + GST (min. Rs. 5,000 and max. Rs. 50,000)

South Indian Bank

Repo Rate + 3.35% p.a. onwards

0.50% of the loan amount or a minimum of Rs. 5,000 + GST

PNB Housing Finance Limited

8.75% p.a. onwards

Up to 0.50%

Federal Bank

8.80% p.a. onwards

Housing Loan: 0.50% of the loan amount (min. Rs. 3,000 and max. Rs. 7,500)Property Power Loan: 1% of loan amount (min. Rs. 3,000)

Standard Chartered Bank

8.75% p.a. onwards

1%

Aavas Financiers

Contact the bank

1.00%

Karnataka Bank

8.75% p.a. onwards

Contact the bank

Sundaram Home Finance

7.85% p.a.

Rs.3,000 (for salaried)

Dhanlaxmi Bank

ranges up to 15% p.a.

1% of the loan amount

Tata Capital

8.60% p.a. onwards

0.50%

Tamilnad Mercantile Bank

9.35% p.a. onwards

0.50%

Bandhan Bank

9.15% p.a. onwards

Contact the bank

Yes Bank

9.40% p.a. to 10.25% p.a.

2% of the loan amount plus GST or Rs. 10,000, whichever is higher

Hudco Home Loan

8.95% p.a. onwards

NA

Indiabulls

8.75% p.a. onwards

0.50% onwards

Aditya Birla

8.80% p.a. onwards

Up to 1%

GIC Housing Finance

8.80% p.a. onwards

8.80% p.a. onwards

Reliance Home Finance

9.75% p.a onwards

Up to 2%

Shriram Housing

10.49% p.a. onwards

NA

India Shelter Finance

13.00% p.a. to 20% p.a.

2.00% to 3%

*Updated Home Loan Interest Rates for All Banks as of September 27, 2023 

*Please note that all HDFC Home Loans are subject to the sole discretion of HDFC Home Loans.

 

How to Compute Home Loan Interest? 

Home loans are typically long-term commitments, and it's crucial to understand your total interest obligation from the outset. You can determine this using one of the two methods outlined below:

 

How to Calculate the Effective Interest Rate? 

The interest rate applicable to a home loan comprises two key components: the base rate and the markup rate. The combination of these elements determines the total interest you will pay on your loan. Let's delve into these components to provide you with a clearer understanding.

Effective Interest Rate (EIR) = Base Rate + Markup

Starting from April 2016, the Reserve Bank of India (RBI) introduced a new method for calculating lending rates, replacing the base rate system. The Marginal Cost of Funds Based Lending Rates (MCLR) was introduced to enhance transparency and flexibility in the way banks and financial institutions in India publish interest rates. Under the MCLR system, banks determine interest rates by assessing the risk associated with lending to borrowers. Factors considered include the repo rate, deposits, and more. As a result, the interest rates computed using MCLR tend to be slightly lower than those calculated under the previous base rate system

Types of Home Loan Interest Rates 

Most banks offer two primary types of home loan interest rates:

Fixed Interest Rate:Under this system, the interest rate remains constant throughout the loan's tenure. There are no fluctuations in the interest charges, and you have the option to switch to a floating rate system after a specified period into the loan.

Floating Interest Rate:In this type, the interest charges on your home loan are tied to the current prevailing lending rates of the bank. The rate is linked to the bank's latest published rate, which is influenced by various factors, including the RBI's monetary policy, lending rate adjustments, and the bank's response to these changes.

Factors Influencing Your Home Loan Interest Rate 

When seeking a home loan, it's vital to grasp the elements that lenders take into account when evaluating your eligibility and determining the interest rate. Since home loans typically involve substantial sums, banks and Housing Finance Companies (HFCs) conduct thorough assessments of your credit history, repayment capability, income, and property details. It's worth noting that lower interest rates often entail more stringent eligibility criteria. Here are the key considerations that lenders consider:

Home Loans Interest Rates FAQ's

The home loan interest rate is the percentage charged by the lender to the borrower for using the principal loan amount. It determines the cost of your home loan. When you make your home loan EMI (equated monthly installment) payments, the interest rate determines how much you must pay to the lender each month. These interest rates are typically linked to factors like repo rates and can vary from one lender to another.
While interest rates offered by banks can fluctuate at their discretion, currently, Bank of Maharashtra is offering the lowest home loan interest rate at 8.40% per annum to its customers. It's important to note that this rate is applicable specifically to home loan applicants who are women.
Home loan interest rates are currently at a 15-year low, with most banks offering lower rates compared to the previous financial year. To obtain the lowest home loan interest rates, it's advisable to compare rates offered by various lenders. Always utilize a home loan EMI calculator when making these comparisons as it will help you estimate your monthly payments more accurately.
Opt for a Shorter Tenure – While long-term loans offer lower EMIs, they increase the overall cost of the loan since you pay interest for a longer duration. Choosing a shorter tenure can significantly reduce the interest amount over time. Use a home loan EMI calculator when comparing long-term and short-term home loans.
The Loan-to-Value (LTV) ratio represents the percentage of the property cost that the bank finances, with the rest being covered by the homebuyer. Most banks typically finance up to 90% of the property cost, although this percentage may vary based on the loan amount. Lenders use LTV ratios to assess the risk associated with the loan and determine whether to approve or reject it.
Bank of India and SBI offer attractive interest rates for self-employed professionals and non-professionals, with rates starting at 6.85% per annum and 8.05% per annum, respectively.
You can calculate the total interest payout for your housing loan using a home loan EMI calculator. Simply input the loan amount, tenure, and interest rate. The calculator will not only provide your EMI amount but also generate a detailed amortization table showing your repayment schedule. Through this table, you can track how much interest you've paid against your loan over time.

Forgot Password