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A home loan is a specified sum of money that an individual borrows from a financial institution to buy or construct a house. It can also be used for expanding, repairing and renovating an existing property. It is a type of secured loan, wherein the property being purchased is pledged to the bank or lending institution till the borrowed amount is repaid along with the interest. In India, home loan interest rates start at as low as 8.10% p.a., with loan tenure stretching up to 30 years.

For many people, buying a house can be a difficult task because of increasing real estate price or lack of surplus cash. Thus, a home loan can help in taking this big financial step without breaking the savings and investments. Home loans come with a host of benefits and features, including balance transfer facility, top-up loan, flexible repayment options and quick approvals.

 

Features and benefits of home loans vary for different lenders and loan schemes. Some of the common ones are listed below:

  • Lower Interest Rates: A home loan is a long-term commitment, thus, interest rates play an important role in deciding not only the loan amount, but also the tenure of repayment. Banks and financial institutions offer reasonable and attractive interest rates to make home loans more affordable than personal loans.
  • Flexible Loan Tenure: Home loan repayment period is usually of up to 30 years, though this depends on the lender, the chosen loan scheme and repayment capacity. Since the tenure is too long, lenders provide their borrowers with the option to prepay or foreclose their outstanding amount whenever they are in a condition to do so. Borrowers can also choose their loan tenure, if they are able to convince the lenders of timely loan repayments.
  • Tax Benefit for Interest Amount: A home loan EMI (Equated Monthly Instalments) has two components – interest amount and principal amount. The interest paid for the year can be claimed as deduction up to a maximum of Rs. 2 lakh under Section 24 of the Income Tax Act, 1961.
  • Tax Deduction on Principal Repayment: The principal component of a home loan EMI paid for the year is allowed a tax deduction under Section 80C of the Income Tax Act, 1961. The maximum amount that can be claimed is up to Rs. 1.5 lakh. But to claim this deduction, the purchased property should not be sold within 5 years of possession.
  • Additional Tax Deduction on Home Loan: Home loan borrowers get additional tax deduction of up to Rs. 50,000 and Rs. 1.5 lakh under Section 80EE and Section 80EEA, respectively. To claim the tax benefit under Section 80EE, the home loan amount should be Rs. 35 lakh or less, the value of the property should not exceed Rs. 50 lakh and borrowers should not own any other house on the date of the sanction of loan. To claim tax benefit under Section 80EEA, the stamp value of the property should not exceed Rs. 45 lakh and the borrower should not own any other house on the date of sanction of loan.
  • Easy Balance Transfer Facility: Home loan balance transfer is a facility in which the outstanding loan amount with one lender can be transferred to another lender, which offers a lower interest rate or better loan terms. The new lender pays off the entire outstanding loan amount to the previous lender. After this, the borrower pays the EMIs at the new rate to the new lender.
  • Top-up Loan Facility: There may come a time when you would need money over and above your existing home loan. For such situations, lenders offer a top-up loan facility. It is an additional amount that you can avail over and above your existing home loan. The facility is not offered to all the borrowers as various factors like borrower’s repayment capacity and past credit records are taken into consideration before doling out this benefit. 

Banks and Housing Finance Companies (HFCs) offer home loans for different purposes. So before applying for any type of home loan, assess your requirements in order to get a suitable home loan scheme. Some of the types of home loans available are as follows:

  1. Home Purchase Loan is the most common type of home loan availed usually to buy ready-to-move-in properties, under construction properties and pre-owned homes/resale properties. As per RBI guidelines, lenders can offer loan-to-value (LTV) ratio of up to 75-90% of the property value.
  2. Composite Loan is a perfect financing solution for individuals who want to buy a plot of land either for investment or for building a house. In this type of home loan, the first disbursement is made towards the purchase of plot. The subsequent payments depend on the stages of construction of the house.
  3. Home Construction Loan is available for individuals who want funds for the construction of a house. The loan is granted only if you own a plot of land and plan to construct a house on it. Just as in composite loan, here too the disbursement depends on the stages of construction of the house.
  4. Home Improvement Loan can be availed to fund home renovation and home repairing expenses of the existing house. The interest rate for this loan is same as that for a regular home loan. However, its loan tenure is shorter than the regular home loan.
  5. Home Extension Loan is for those who require funds to add more space to their abode. Under this loan type, financial institutions usually lend 75-90% of the construction estimate, depending on the loan amount and LTV ratio.
  6. Bridge Loan is a short-term home loan and is suitable for individuals who wish to buy a new house with the sale proceeds of the existing home. The loan helps in covering the gap between the purchase of a new house and the sale of an existing house.
  7. Interest Saver Loan is similar to home loan overdraft facility. In this, the borrowers’ home loan account is linked to their bank account. Any amount deposited in the bank account over and above the EMI amount is used as prepayment towards the loan, thus, saving on the interest amount.
  8. Step Up Loan is a type of home loan in which borrowers pay lower EMIs during the initial years of the loan tenure. However, there is a provision of increasing the EMI amount over time. This makes the loan affordable for young professionals who just start their career.

Home loans are sanctioned either at fixed interest rates or floating interest rates. Read below to find out more about it.

What is Fixed Rate Home Loan?

In case of fixed rate home loans, the rate of interest applicable at the time of loan disbursal remains constant during the loan period. And because of the unchanged interest rate, the loan EMIs also remain constant. A disadvantage with fixed rate home loan is that its interest rate is usually 1% - 2.5% higher than the interest rate for floating rate home loan. Furthermore, at any time during the loan tenure if home loan interest rate decreases, the fixed interest rate will remain unchanged, giving you no benefit of the reduced EMIs.

What is Floating Rate Home Loan?

In case of floating rate home loan, the interest rate does not remain constant during the loan tenure. This kind of interest rate comprises two parts – index and spread. The index is the benchmark rate (such as Base Rate, Marginal Cost of Funds based Lending Rate (MCLR) and Repo Rate) that reflects general market conditions. And spread is the additional amount that a bank adds to cover the credit risk, profile mark-up, and so on. The spread varies from one lender to another and usually remains constant throughout the loan tenure. Index, however, alters as per RBI policies and other external factors, causing the home loan interest rates to change. An increase in the index can lead to an increase in home loan rates and the EMIs, and vice-versa.

Floating interest rate home loans are cheaper compared to fixed interest rate home loans. Also, RBI mandates no prepayment or foreclosure charges for individuals borrowing a floating rate home loan. The only problem with a floating rate home loan is that its EMIs change with the change in the interest rate, which can create difficulty in planning expenses in advance.

Fixed Rate Vs Floating Rate

Both types of home loan interest rates have their own list of pros and cons. When it comes to choosing between fixed and floating interest rates on home loans, pick the one that suits your needs the best. Before zeroing in on your choice, check this out - Comparison between Fixed and Floating Interest Rate.

Home Loan Interest Rates Offered by Popular Lenders

Home loan rate of interest, in case of most lenders, ranges between 8.20% and 13% p.a. These rates are liable to change as per RBI’s directives and lenders’ policies.

Name of Lender

Interest Rate

Axis Bank

8.55% onwards

Bajaj Housing Finance Limited

8.85% onwards

Bank of Baroda

8.10% onwards

Citibank

8.37% onwards

HDFC Bank

8.25% onwards

LIC Housing Finance Ltd.

8.35% onwards

ICICI Ltd.

8.65% onwards

Standard Chartered Bank

9.26% onwards

State Bank of India

8.15% onwards

Note: Interest Rates offered by Banks, NBFCs and HFCs are subject to change as per the directives of RBI and lenders’ discretion

An EMI calculator is an online tool that helps calculate the monthly instalments to be paid during the entire loan tenure. Paisabazaar.com brings you a free-of-cost home loan EMI calculator so that you know the EMI in advance in order to take an informed decision regarding the affordability of your home loan. Additionally, the home loan EMI calculator is an effective tool for comparing different loan options available in the market. At Paisabazaar.com, you can check your home loan eligibility and also check and compare various available home loan deals.

To use the calculator, the details required are – principal amount, interest rate and loan tenure. If done manually, this calculation can be lengthy and time-taking; however, Paisabazaar's home loan EMI calculator gives instant results. To calculate your Home Loan EMI, click here.

Besides the interest amount, there are several other fees and charges that your lender might levy from the time of applying for the home loan till you repay it entirely. Here are some of the charges:

  1. Application Fee is charged by lenders to cover all the preliminary expenses that they bear for conducting verification.
  2. Processing Fee covers the cost of credit appraisal and depends on the borrowers’ credit profile, income and the home loan scheme. Also, not all lenders levy processing fee.
  3. Administrative fee is charged by those lenders who split the processing fee into two parts. The part charged after the loan sanction is known as the administration fee. Citibank is one of the banks to levy administrative fee.
  4. Foreclosure/Prepayment Charges are levied when a borrower prepays the home loan either fully or partially before the end of loan tenure. Earlier, lenders used to charge prepayment penalties and foreclosure charges on home loan. But RBI banned lenders from charging individuals with prepayment penalties on floating rate home loans. As far as fixed rate home loans are concerned, some lenders levy these charges.
  5. Repayment Mode Related Charges are levied when borrowers request their lenders to change their existing repayment mode during the loan tenure. The fee usually goes up to Rs. 500 per instance (swap) and varies from one lender to another.
  6. Rate conversion/switching fees are charged when borrowers request their lenders to switch or reduce their existing interest rates due to various reasons. The fee varies from one lender to another and usually goes up to 2% of the outstanding principal amount.
  7. CERSAI Charges (Central Registry of Securitisation Asset Reconstruction and Security Interest) is central online security interest registry of India. Potential lenders visit CERSAI website to check whether the pledged property is not claimed by some other lender. For this process, the lenders pay a nominal fee, which they later collect from borrowers.
  8. Overdue Charges on EMI are levied when a borrower misses or delays timely payment of loan EMIs. It attracts penal interest rates on the outstanding dues or overdue instalment over the prevailing loan interest rates. Therefore, borrowers must pay loan EMIs on time.
  9. EMI Bounce Charges are levied when you fail to make timely loan payment due to insufficient funds in your bank account. Lenders usually levy Rs. 500 on such defaults which may vary from one lender to another.
  10. Legal Fee is usually included in the processing fee but some lenders charge it separately when they engage firms to scrutinise borrowers’ legal documents.
  11. Franking Fee, commonly referred to as stamp duty fee, is a tax levied by the state government on any form of monetary transaction involving the transfer of rights of a property. The amount varies from one state to another, and depends on state laws, type of property, etc.To get more details on costs associated with home loan, click here.

Read AlsoUnderstanding Stamp Duty and Registration Charges

Home loan eligibility is a set of conditions defined by lending institutions that applicants must fulfil to get the required loan scheme. It differs across lending institutions and loan schemes. Some of the factors that influence home loan eligibility include age, repayment capacity, work experience and credit score. A common set of housing loan eligibility criteria is given below:

Home Loan Eligibility Criteria

Nationality

Indian Residents, Non Indian Residents (NRIs) and Persons of Indian Origin (PIOs)

Credit Score

750 or above

Age Limit

Minimum – 18 years
Maximum – 70 years

Work Experience

At least 2 years

Business Continuity

At least 3 years

Minimum Salary

At least Rs. 25,000 per month (varies across lenders & locations)

Loan-to-Value (LTV) Ratio

Up to 90% of property’s value

Note: The values in the table may vary from one lender to another.Note: The values in the table may vary from one lender to another.

Ways to Enhance Home Loan Eligibility

Potential home loan borrowers can enhance their home loan eligibility in the following ways:

  1. Improve your credit score: A good credit score improves your chances of loan approval so that you can avail a home loan at lower interest rates and better terms. Paying your bills on time and maintaining credit utilisation ratio below 40% are some of the ways to improve and maintain your credit score.
  2. Pay higher down payments: Financial institutions lend 75-90% of the property value. This implies that the remaining 10-25% of the property value has to be contributed as down-payment by borrowers. To increase your home loan eligibility, make higher contribution towards your home loan down payment. Doing so will lower your LTV ratio; thus, improving your home loan eligibility.
  3. Add an earning co-applicant: Add an earning co-applicant with good credit history and satisfactory repayment capacity to increase your home loan eligibility. Joint home loan might even help you get higher loan amount and concession on your home loan interest rates (if the co-applicant is a woman).

Read Also: Top Tips to Enhance your Home Loan Eligibility

Home loan application forms usually have a checklist of documents that applicants need to submit to their lenders. These documents are usually same for all lenders; however, a few specific requirements may vary depending on the chosen loan scheme, purpose of the loan and individual credit profile. Some of the common documents required for getting a home loan are:

  • Duly filled in and signed home loan application form
  • Passport size photographs, as required
  • Proof of Identity: Copy of any one (PAN Card, Passport, Aadhaar Card, Voter’s ID Card and Driving License)
  • Proof of Age: Copy of any one (Aadhaar Card, PAN Card, Passport, Birth Certificate, 10th Class Mark-sheet, Bank Passbook and Driving License)
  • Proof of Residence: Copy of any one (Bank Passbook, Voter’s ID, Ration Card. Passport, Utility Bills (Telephone Bill, Electricity Bill, Water Bill, Gas Bill) and LIC Policy Receipt
  • Proof of Income for Salaried – Copy of Form 16, latest payslips, IT returns (ITR) of past 3 years and investment proofs (if any)
  • Proof of Income for Self Employed: Details of ITR  of past 3 years, Balance Sheet and Profit & Loss Account Statement of the Company/Firm, Business License Details and Proof of Business Address
  • Property-related Documents: NOC from Society/Builder, detailed estimate of the cost of construction of the house, registered sale deed, allotment letter and an approved copy of the building plan

Note: The above list is indicative and your lender might ask for additional documents.

Home loan balance transfer is a facility that allows home loan borrowers to transfer their outstanding home loan to a new lender for lower interest rate or better loan terms. Almost all lenders offer the home loan transfer facility to their customers. Paying your loan EMIs regularly is one of the factors that help you enjoy loan transfer facility. But before going for home loan balance transfer, carry out a cost-benefit analysis. Calculate the difference between the interest rates offered by the two lenders, the amount of the loan left unpaid and the remaining tenure.

Home loan balance transfer is not an ideal option if the outstanding loan amount is low, if only a few repayment years are remaining or the difference in the interest rate is leading to negligible savings. Also, do not forget to consider processing fee charges, which the new lender would be charging for balance transfer.

Must Read: Top 10 Banks for Home Loan Balance Transfer

Home loan prepayment is when a borrower prepays his/her home loan partly before the end of the loan tenure. Loan prepayment helps in reducing the loan principal amount, which subsequently reduces the EMI amount. If the borrower has no issues with continuing with the on-going EMI amount, he/she can request his/her lender to reduce the loan tenure instead of reducing the loan EMI.

Read Also: 5 Smart Ways to Pre-Pay Your Home Loan

Home loan foreclosure, on the other hand, is when a borrower fully repays the home loan in a single payment instead of paying in instalments before the end of loan tenure.

Earlier, lenders used to charge prepayment penalties and foreclosure charges on floating rate home loans. But now RBI has mandated all lenders to not levy loan foreclosure and prepayment charges on floating rate housing loans when individuals pre-close the loan. However, on fixed rate home loans, some lenders still levy these charges.

  • Rate of Interest: Some home loan providers charge fixed and some floating rate of interest on home loans. Fixed interest rates are considered ideal for loans with shorter tenure, while floating is suitable for loans with longer tenure. Some lenders even offer hybrid home loans in which the borrower can enjoy the benefit of both fixed and floating interest rates.
  • Loan Disbursal Time: The time for home loan disbursal varies from one bank to another. It usually takes around 10-15 days for loan processing and disbursal. Choose a home loan provider which takes lesser time and does not cause unnecessary delays in home loan processing.
  • Loan Eligibility: Home loan eligibility criteria vary from one lender to another. The usual home loan eligibility of an individual is determined by the borrower’s age, income, work profile and stability, credit history, etc. Always use home loan eligibility calculator to be sure whether you are eligible for the home loan or not.
  • Hidden Charges: Loan providers levy a number of additional charges, such as the processing fee, prepayment or foreclosure charge, etc. It is best to read the fine print before making the final choice so that you do not end up feeling pick-pocketed when such charges are levied.
  • Terms and Conditions: List of terms and conditions pertaining to repayment, prepayment, loan transfer, and many other things related to the home loan should also be taken into account while choosing a home loan.

Apply for home loan at Paisabazaar.com to avail a host of benefits. Some are listed as below:

  • Check your home loan eligibility
  • Know how much you can borrow
  • Calculate your home loan EMI in advance
  • Get the best home loan offers based on your requirements
  • Compare different home loan offers against different parameters
  • Apply for home loan online and get quick approval

How to Get Home Loan through Paisabazaar.com

Paisabazaar.com is an unbiased comparison portal. It allows you to analyse various home loan offers available in the market according to the key data provided by you. Enter some basic information related to your housing loan requirements, such as the purpose for availing the home loan, city where you wish to buy the property, loan amount, loan tenure, your employment type, etc. Based on these details, you will get home loan options that you are eligible for. You can compare the presented options and pick the offer that suits your requirements the best.

How to Apply for Home Loan at Paisabazaar.com

  • Go to home loan section at paisabazaar.com to start with the home loan application process
  • Fill out the required fields and accept the terms and agree to the given terms & conditions
  • Enter your personal and home loan-related details to proceed
  • A few eligible loan options will appear. Compare and apply for a home loan which suits your requirements

Q. Can I get a home loan for the entire property value?
Ans - No. Banks usually keep a 20% margin when providing individuals with a home loan. This means that the lender may agree to provide you with 80% of the property value as a home loan, while you will have to shell out the rest 20% by yourself. In some cases, the lender can agree to provide you with up to 90% of the property value as a home loan.

Q. Are there any tax benefits of a home loan?
Ans - Yes. Both the loan principal amount and the interest paid towards loan repayments provide tax benefits under Section 80C and Section 24 of the IT Act respectively.

Q. Who can co-sign a home loan with me? Can my friend co-sign a home loan for a flat?
Ans - Your family members like father, mother, siblings, etc. can co-sign a home loan with you. Other than that your spouse or adult children can also be co-signatories in case you are applying for a home loan. In India, as per existing rules, your friend cannot co-sign a loan as he/she is not a blood relative or otherwise related to you.

Q. How many people can co-sign a home loan with me?
Ans - At present, up to 7 people can co-sign a home with the primary applicant. However, all of them need to be blood- relatives of the family member.

Q. Are there any prepayment charges in case of a home loan?
Ans - In case of a floating rate home loan, lenders don't charge a pre-payment penalty as per RBI directives however a penalty may be applied in case of prepayment of a fixed-rate home loan. You can visit the Home Loan FAQs page for additional details on home loans.

Q. How home loan EMI is calculated?
Ans - Equated Monthly Instalment (EMI) is the amount that you repay each month against your home loan principal amount and its interest amount. So, while calculating the home loan EMI, both the principal amount and the accrued interest on the loan is taken into consideration.

Q. How to use Home Loan EMI calculator?
Ans - Home loan EMI calculator is an effective tool for comparing different loan options which are available to you from different banks and financial institutions. You can use the home loan EMI calculator on Paisabazaar to calculate the EMI which you will have to pay for your home loan. Paisabazaar's home loan EMI calculator will provide you instant results to help you take an informed decision. You only need to provide few details like loan amount, interest rate and tenure of the home loan. You can check your EMI by following the below-mentioned steps:

  • There are three sliders in the EMI calculator – Loan Amount, Rate of Interest and Tenure
  • All you need to do is choose the desired loan amount, rate of interest and tenure of the home loan, respectively, on the sliders
  • After you adjust these sliders, Paisabazaar.com will display your monthly EMI amount.

Q. What are the important points to remember while choosing a home loan?
Ans - Home loan is a long term obligation to fulfil. One should always stay aware and keep in mind the following points while choosing a home loan in India online:

  • Factors Affecting Eligibility Criteria
  • Negotiate the Interest Rate
  • Check hidden cost while comparing different lenders like processing fees, foreclosure charges, prepayment costs, valuation costs etc.
  • Compare different lenders to get the best home loan at affordable rates
  • Longer the tenure – Costlier the Home Loan
  • Choose floating rate of interest over fixed interest rate
  • Read all the terms and conditions carefully
  • Check your credit score. People with low credit score may face loan rejection or if it is accepted, it may come with a higher rate of interest.

All of the above stated points hold true if you are wondering how to choose the right home loan.

Q. What are the reasons for home loan rejection?
Ans - Factors that can play a crucial role in home loan rejection are mentioned below:

  • Bad or low credit score
  • Incorrect personal details in credit report
  • Rejection of loan by other banks
  • Unstable income
  • Age factor
  • Location of the property
  • Poor repayment capabilities

Q. How to avoid home loan rejection?
Ans - The below mentioned steps can prove to be beneficial to avoid home loan rejection:

  • Credit Score: It is advisable to maintain a credit score of 750 and above to have a good chance of your application being approved. Banks & Financial Institutions rely on credit score before approving your home loan to check your credibility and loan repayment history. So, you should always maintain your credit score to avoid home loan rejection.
  • Insufficient Income: Banks and financial institutions look into your monthly income to see if you will be able to repay your equated monthly instalments (EMIs) or not. It is always advisable to take a home loan with EMI not more than 40% of your monthly income. Lenders have certain minimum income and employment requirements which play an important role in the loan-approval process. Make sure that you meet all the requirements before you apply for a home loan.
  • Too many applications for home loan in a short span of time: If you apply for a home loan from different lenders, it indicates banks and financial institutions that you are short of credit and need to apply to several sources to fill the gap. Lenders think that you will not be able to repay your loan, which leads to rejection of your home loan application.
  • Existing loan portfolio: Currently, if you have a number of loans to repay, then your lender might think that you will not be able to take on another EMI on your existing income, which will lead to your home loan rejection. So, it is better to apply for a home loan once you have paid off a few of your other loans to reduce your EMI burden.

Q. Can NRIs take home loan?
Ans - Yes, NRI can apply for home loan. for more details visit NRI home loan page.

Q. How to track home loan application status?
Ans - To check your home loan application status, you can call at our customer care number 18002088877 or mail us at care@paisabazaar.com with your home loan reference number.

Have more queries visit our home loan FAQs page.

SBI reduces its 1-year MCLR by 10 basis points

10th December 2019 - For the eighth consecutive time, the State Bank of India (SBI) has reduced its one-year Marginal Cost of funds based Lending Rate (MCLR) to 7.90% from 8.00%. The revised SBI home loan interest rates will come into effect from December 10, 2019.

OBC reduces its MCLR by up to 15 basis points

8th December 2019 - Oriental Bank of Commerce (OBC) has reduced its Marginal Cost of Funds based Lending Rate (MCLR) by 15 basis points (bps) across various tenors. the revised rates will be in effect from December 10, 2019. the revised one-year MCLR of the bank is 8.30%, which was earlier 8.35%. Currently, the bank's overnight, one-month, three-month and six-month MCLR has been reduced to 7.70%, 7.75%, 7.90% and 8.05%, respectively. 

HDFC lowers lending rates by 10 bps

14th October 2019 - HDFC has reduced its lending rates by 10 basis points (bps). The change in rates is applicable to both new and existing borrowers, effective from 15th October 2019. After the rate cut, HDFC home loan interest rate currently stands at 8.25% p.a. for salaried borrowers.

Bank of Baroda lowers repo-linked retail loan pricing by 25 bps

7th October 2019 - Post the RBI’s reduction of repo rate cut by 25 basis points, the Bank of Baroda on Monday reduced its repo-linked retail loan pricing by 25 basis points (bps). After the bank’s rate cut, the interest rates applicable to home loans starts from 8.10% p.a.

RBI cuts repo rate by 25 points

4th October 2019 - In today’s Monetary Policy Committee (MPC), the repo rate has been reduced by 25 basis points (bps). Before the rate cut, the repo rate was at 8.40%. After the rate reduction, the revised repo rate is 8.15%, which is the lowest since March 2010. The committee has also made the decision to go on with an accommodative stance as long as it is necessary to revive economic growth.

Key Takeaways for Housing from FM Nirmala Sitharaman's Press Conference

14th September 2019 - To tackle the current economic slowdown, the Finance Minister Nirmala Sitharaman announced a few relief measures with a focus on reviving the housing sector. Firstly, the government has planned to relax the current External Commercial Borrowing (ECB) norms to ease the financing of homebuyers who are eligible under Pradhan Mantri Awas Yojana (PMAY) scheme. Secondly, the interest on house building advance will be reduced and linked with 10-year G-Sec bond yield. Lastly, the government will provide financial aid of Rs. 10,000 crore along with investors such as LIC who are expected to contribute approximately the same amount for housing projects which are non-NPA and non-NCLT and are not worth positive in affordable and middle-income category to be set up. The aim of this move is to help real estate developers finish the incomplete units.

Govt. contributes Rs. 20,000 crore to fund stalled housing projects

14th September 2019 -The Union Finance Minister, Nirmala Sitharaman, in her 3rd press conference announced that a “special window will be set to provide last mile funding for housing projects which are non-NPA and non-NCLT projects and are net worth positive in the affordable and middle-income category.” The minister announced that the government will give Rs. 10,000 crore towards the special window. Besides government, other investors such as LIC and Sovereign Funds will also contribute about the same amount for the eligible real estate projects. Through this aid, an estimate of 3.5 lakh of middle-class homebuyers are expected to benefit as the real estate developers will be able to complete their projects that are stuck on account of ‘last mile’ cash shortage.

Bajaj Housing Finance lowers home loan interest rates to 8.6%

9th September 2019 - Bajaj Housing Finance lowered its home loan interest rates from 8.80% to 8.60% for loan amount up to Rs. 30 lakh. Customers planning for home loan balance transfer can also benefit from the revised home loan interest rates. The lending institution offers home loans up to Rs. 3.5 crores and top-up loan for up to Rs. 50 lakh. It is also one of the listed lending partners with Pradhan Mantri Awas Yojana (PMAY).

SBI Home Loan: MCLR comes down to 8.15%

9th September 2019 - State Bank of India (SBI) has announced another cut in its home loan interest rate. After a reduction in Marginal Cost of Funds based Lending Rate (MCLR) by 10 basis points across all tenors, the new rate has come down to 8.15% from the earlier 8.25%. The new rate will be effective from September 10, 2019. However, it is important to note that the existing customers might not be able to immediately enjoy the new lending rate because of their reset clause.

Bank of India to waive loan processing fees for this festive season

8th September 2019 - Bank of India (BoI) has waived loan processing charges and will give home loans at concessional rates. The Bank of India home loan of up to Rs. 30 lakh will be available at 8.35% p.a and above Rs 30 lakh will be linked to the repo rate.

PSB Loans in 59 Minutes: Get home loan approval within 1 hour

5th September 2019 - ‘PSB Loans in 59 Minutes’ has launched in-principle loan approval for home loan and other retail loans. Loan applicants can now get in-principle approval for loans within 59 minutes through 19 public sector banks, which include State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank (PNB) and Union Bank of India (UBI). The loans offered range from Rs. 1 lakh to Rs. 5 crore. The platform has advanced algorithms to analyze data points from various sources such as IT returns, bank statements and GST data.

ICICI Bank slashes MCLR by 10 bps

5th September 2019 - ICICI Bank has reduced its Marginal Cost of funds based Lending Rate (MCLR) by 10 basis points (bps) across all tenors. After the rate cut, the 1-year MCLR has fallen to 8.55% and the overnight MCLR has dropped to 8.30%.

RBI makes repo-linked interest rates mandatory

5th September 2019 - The Reserve Bank of India (RBI) has made the linking of home loans to key repo rates or external benchmarks mandatory. The move will come into effect from 1 October 2019. Among RBI's benchmark Repo Rate, the 3-month or 6-month Treasury Yield published by Financial Benchmarks India Pvt. Ltd (FIBIL) or any other benchmark published by FIBIL, banks can choose any one of the external benchmarks to link its loan products. RBI has also allowed banks to decide the spread over the external benchmark rates on the basis of customer’s risk profile. The interest rate under the external benchmark shall be reset at least once in 3 months.

Indian Bank links home loan to repo rate to cut MCLR by 15 bps

2nd September 2019 - Indian Bank has reduced its Marginal Cost of funds based Lending Rates (MCLR) by 15 basis points (bps). The 1-year MCLR has been reduced to 8.45% from 8.60%. The revised rates will be effective from 3rd September 2019. The bank has also linked its home loan with Repo Based Lending Rate (RBLR), which is fixed at 8.20% from 1 September 2019. The interest rate on the new Indian Bank home loan product will get revised automatically when the rate changes. The RBLR linked home loan products will be effective from 4th September 2019.

Central Bank of India to offer repo-linked interest rate on loans

1st September 2019 - Central Bank of India will be offering repo-linked interest rate (RLIR) on home loan with immediate effect. Besides the new customers, the existing CBI home loan borrowers will also be given an option to switch over to the new repo-linked interest rate at a fee.

Union Bank of India slashes MCLR from September 1

31st August 2019 - Union Bank of India has reduced its Marginal Cost of Funds-based Lending Rate (MCLR) by up to 15 basis points (bps) across all tenors. The rate cut is effective from September 1. The bank’s 1-year MCLR is reduced to 8.35% from 8.50%. The MCLR for overnight tenor is down to 7.95% from 8.10%. The MCLR for one month tenor is cut to 8% from 8.10%. The bank also offers 3-month and 6-month MCLR at 8.10% and 8.20%, respectively. Earlier this month, the bank also introduced Repo Linked Lending Rate (RLLR) for new home loans. For home loans above Rs. 30 lakh to Rs. 75 lakh, the bank is levying 8.25% RLLR. The bank will also continue to offer home loan linked to MCLR to its customers.

Bank of India introduces repo-based interest rate for home loan

31st August 2019 - Bank of India (BoI) has announced to introduce repo-based interest rate for home loans. The repo-liked home loan product will be available to customers from September 1 and would be formally launched at the bank's 114th Foundation Day, which falls on 7th September 2019. The bank has fixed RLLR at 8.20%. The RLLR linked Bank of India home loan interest rates start from 8.50% p.a.

SBI launches ‘Home Loan on Wheels’ initiative

31st August 2019 - To educate people about new home loan product, which is linked to Repo linked Lending Rate (RLLR), the State Bank of India has planned a new initiative – Home Loan on Wheels. Under this initiative, a van will drive around Chennai and provide information on bank’s home loan products customized to suit the needs of different segments of customers.

Government’s Urban Affordable Housing scheme inches closer to target

31st August 2019 - Pradhan Mantri Awas Yojana - Urban (PMAY-U) is nearing its target of meeting the ‘Housing for All’ aim in urban areas. Under the scheme, which is to be completed by 2022, has sanctioned over 88 lakh houses till now. A total of 2.99 lakh houses have been sanctioned as part of 865 proposals from 10 states. With the approval of above fresh proposals, cumulative sanctions of houses under PMAY-U is now 88.16 lakh against a validated demand of 1.12 crore.

 

Home Loan Provider

Home Loan Interest rate

Processing Fee

HDFC Ltd.

8.25% onwards

Up to 0.5% of loan amount

State Bank of India

8.15% onwards

0.35% – 0.50% of the loan amount (Min. of Rs. 2,000;  Max. of Rs. 10,000)

LIC Housing Finance Ltd.

8.35% onwards

As applicable

IDFC Bank

8.15% onwards

Up to 3% of the loan amount

CitiBank

8.50% onwards

Up to Rs. 5000

DBS Bank

up to 8.45% 

Up to Rs. 10,000

Kotak Mahindra Bank

8.60% onwards

Up to 2% of loan amount

Karnataka Bank

8.90% onwards

Up to 0.5% of loan amount

ICICI Bank

8.65% onwards

0.5% – 1.00% of loan amount (Min. of Rs. 1,500)

PNB Housing Finance Ltd.

9.25% onwards

Up to 1% of loan amount

Axis Bank

8.55% onwards

Up to 1% of loan amount (Min. Rs. 10,000)

IDBI Bank

8.50% onwards

0.50% of loan amount

Tata Capital

9.25% onwards

0.50% of loan amount

Bank of India

8.35% onwards

8.65% onwards (Min. 1000 and Max. Rs. 20,000)

Syndicate Bank

8.15% onwards

Min. Rs. 500 to Max. Rs. 5,000

Canara Bank

8.35% onwards

0.50% of the loan amount (Min. Rs. 1,500; Max. Rs. 10,000)

United Bank of India

8.15% onwards

0.59% of loan amount (Min. Rs.1,180; Max. Rs.11,800)

IIFL

9.75% onwards

Rs 3000 to 0.75% of the loan amount

Standard Chartered Bank

9.26% onwards

Up to 1% of the loan amount

YES Bank

9.85% onwards

2% of loan amount (Min. Rs.15,000)

*The interest rates provided above are of key Banks and Housing Companies Operating in India, indicative and liable to change periodically.

*Figures mentioned in the above table are subject to change without prior information.

The final interest rate charged by the bank to the customer would be based on various other factors at the discretion of the lender.

The variation in Home Loan Interest rates may occur on the basis of key factors such as applicant's credit score, prior lender-borrower relationship and the loan amount applied for.

Home Loan
4.7 / 5 (658 Reviews)

Home Loan

PaisabazaarGood loan schemes
4/5

HDFC Bank Home Loan

HDFC bank has good loan schemes with decent interest rates and are a saviour.


Posted on: Jun 22 , 2019
PaisabazaarThappa
5/5

Jammu Kashmir Bank Home Loan

To,the bank manager ,sir mane home loan.chahiye kiunki Mera home barish ki bja se gir raha ha


Posted on: Jun 17 , 2019
PaisabazaarMaximum loan tenure
5/5

Punjab National Bank Home Loan

I got a 30 year tenure to clear my liability with ease at PNB.


Posted on: May 27 , 2019
PaisabazaarMinimum loan tenure
5/5

Punjab National Bank Home Loan

I applied for a minimum tenure of 5 years for my PNB home loan.


Posted on: May 27 , 2019
PaisabazaarMaximum loan amount
5/5

Punjab National Bank Home Loan

I needed 10 crores for my dream home and got the PNB loan approved.


Posted on: May 27 , 2019
PaisabazaarMinimum loan amount
5/5

Punjab National Bank Home Loan

I applied for a minimum loan of 10 lakhs at PNB and got it approved.


Posted on: May 27 , 2019