Apply for Home Loans @ 6.40% Onwards
Current Home Loan Interest Rates, January 2022
| Name of Lender | Up to 30 Lakh | Above 30 Lakh & Up to 75 Lakh | Above 75 Lakh |
| PUBLIC SECTOR BANKS | |||
| Bank of Baroda | 6.50% – 8% | 6.50% – 8% | 6.50% – 8.25% |
| Punjab National Bank | 6.55% – 7.95% | 6.50% – 7.65% | 6.50% – 7.60% |
| Punjab & Sind Bank | 6.50% onwards | 6.50% onwards | 6.50% onwards |
| State Bank of India | 6.70% – 7.65% | 6.70% – 7.75% | 6.70% – 7.85% |
| Union Bank of India | 6.40% – 7.60% | 6.40% – 7.65% | 6.40% – 7.65% |
| Indian Bank | 6.50% – 7.70% | 6.50% – 7.50% | 6.50% – 7.50% |
| Central Bank of India | 6.85% – 7.30% | 6.85% – 7.30% | 6.85% – 7.30% |
| Bank of India | 6.50% – 8.35% | 6.50% – 8.35% | 6.50% – 8.35% |
| UCO Bank | 6.50% – 7% | 6.50% – 7% | 6.50% – 7% |
| Bank of Maharashtra | 6.40% – 8.30% | 6.40% – 8.45% | 6.40% – 8.55% |
| Canara Bank | 6.90% – 11.45% | 6.90% – 11.45% | 6.90% – 11.45% |
| Indian Overseas Bank | 7.05% – 7.40% | 7.15% – 7.40% | 7.30% – 7.40% |
| PRIVATE SECTOR BANKS | |||
| Kotak Mahindra Bank | 6.55% onwards | 6.55% onwards | 6.55% onwards |
| ICICI Bank | 6.70% – 7.55% | 6.70% – 7.55% | 6.70% – 7.55% |
| Axis Bank | 6.75% – 11.50% | 6.75% – 11.50% | 6.75% – 11.50% |
| IDBI Bank | 6.75% – 9.90% | 6.75% – 9.90% | 6.75% – 9.90% |
| Karur Vysya Bank | 7.15% – 9.35% | 7.15% – 9.35% | 7.15% – 9.35% |
| South Indian Bank | 7.30% – 10.05% | 7.30% – 10.05% | 7.30% – 10.05% |
| Karnataka Bank | 7.50% – 8.75% | 7.50% – 8.75% | 7.50% – 8.85% |
| Federal Bank | 6.60% – 7.70% | 6.60% – 7.75% | 6.60% – 7.80% |
| Dhanlaxmi Bank | 7.85% – 9% | 7.85% – 9% | 7.85% – 9% |
| Tamilnad Mercantile Bank | 8.25% | 8.25% | 8.25% |
| Bandhan Bank (GRUH Home Loan) | 6.40% – 13.50% | 6.40% – 11.75% | 6.40% – 11.75% |
| RBL Bank | 10.20% – 12.80% | 10.20% – 10.70% | 9.50% – 10% |
| HOUSING FINANCE COMPANIES (HFCs) | |||
| LIC Housing Finance | 6.70% – 7.85% | 6.70% – 8.05% | 6.70% – 8.05% |
| HDFC Ltd. | 6.70% – 8.45% | 6.70% – 8.60% | 6.70% – 8.70% |
| Tata Capital Housing Finance | >=6.70% | >=6.70% | >=6.70% |
| Bajaj Finserv | 6.70% – 14% | 6.70% – 14% | 6.70% – 14% |
| PNB Housing Finance | 6.99%-12% | 6.99% – 12% | 7.15% – 11.50% |
| Repco Home Finance | >=7.15% | >=7.15% | >=7.15% |
| GIC Housing Finance | >=7.90% | >=7.90% | >=7.90% |
| Indiabulls Housing Finance | >=7.60% | >=7.60% | >=7.60% |
| Aditya Birla Capital | 9.00 – 12.50% | 9.00 – 12.50% | 9.00 – 12.50% |
| Reliance Home Finance | 9.75% – 13% | 9.75% – 13% | 9.75% – 13% |
| ICICI Home Finance | 9.20% – 12.25% | 9.20% – 12.25% | 9.20% – 12.25% |
| Home First Finance | 8.00% – 18.00% | 8.00% – 18.00% | 8.00% – 18.00% |
Home loan interest rates for all lenders as of 12th Jan 2022.
Housing loan interest rates in the table are subject to change anytime without prior notice. The interest rates given in the table are subject to the credit/ risk profile as assessed by the lender based on parameters such as credit scores, age, and repayment capacity of the applicant.
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Table of Contents |
Use a home loan EMI calculator to know the EMIs you would be paying against different interest rates and loan tenures. The online loan calculator also works as a home loan interest calculator as it helps you know the interest amount due on your home loan along with the overall EMI amount.
Click here to calculate your home loan EMI
Types of Home Loan Interest Rates
Depending on the interest rate, a home loan is of three types, fixed-rate, floating rate, and hybrid.
1. Fixed Rate Loans – Fixed interest rate remains the same throughout the loan period, thereby, keeping the home loan EMI constant. Applying for a home loan at a fixed rate of interest is better when the current home loan rate of interest is quite low and an upward trend is anticipated in the future. But considering the current trend of decreasing lending rates, banks provide customers with an option to switch over to the variable/floating housing loan interest rates after completing a specific time.
2. Floating Rate Loans – Floating interest rate, also known as the variable rate of interest, is subject to the current market lending rates; and thus, they may change during the loan tenure. The home loan EMIs will increase or decrease as per the interest rate movement. With the current trend of decreasing home loan rates, it will be advantageous for prospective home loan borrowers to apply for home loans at a floating rate of interest.
Read: Fixed Rate vs. Floating Rate – Which rate of interest is better?
3. Hybrid Loans – Hybrid rate home loans are a mix of fixed-rate and floating rate home loans. They will initially have a fixed interest rate for a set period, after which it will change into the floating rate of interest. Such housing loans are best suited for those who got the loan at a low fixed rate and plan to prepay or foreclose it before the floating rate starts.
How to get a home loan at a low interest rate?
Since home loans are usually high-ticket size loans, banks and HFCs do a careful and detailed assessment of the borrower’s credit history, repayment capacity, income along with stringent checks on the property to be purchased. For borrowers seeking a home loan, they must be aware of the factors lenders look at while processing a home loan application, and have a deep awareness of their own eligibility. It needs to be noted that low-interest rates also usually come with stricter eligibility conditions. Here are the factors that lenders evaluate to determine your eligibility for a home loan and the interest rate to be offered:
- Credit score: Your credit score is a numerical representation of your credit history. Those who have paid their EMIs and credit card bills in full, timely, and have not been over-dependent on credit in the past are likely to have a good credit score. If your credit score from CIBIL and other bureaus is 750 and above, lenders would see you favorably for a home loan. Also, banks and HFCs are increasingly using the credit score of the home loan applicants to fix their home loan interest rates. As a high credit score reflects responsible credit behaviour and financial discipline, many banks and HFCs offer home loans to applicants with higher credit scores at a lower interest rate. Please note that if the home has a co-ownership, the credit score of each owner is likely to be checked by the lender, even if the loan is taken by a single co-owner.
- Income and employment: Another key factor lenders evaluate is your income, type of employment, and profile of your employer. Home Loan applicants employed with government or PSUs or those working with large and/or reputed private sector organizations are usually preferred by lenders due to their higher job/income certainty. Hence, lenders offer lower home interest rates to such applicants. On the other hand, if you are self-employed with erratic income flows or have an unstable job profile, or have just begun your professional journey, getting a Home Loan at a lower rate of interest may be difficult.
- Loan amount: The loan amount you seek to borrow can also influence the rate at which you get the housing loan. Home loans up to Rs. 30 lakh usually have a lower interest rate as compared to home loans of higher amounts. To get a better rate of interest on your home loan, one should try and make the maximum down-payment possible. This will not just reduce the overall loan burden but may also help get a lower rate of interest on their loan.
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- Type of home loan: Home loan rate of interest also differs as per the types of home loan. Regular home loans have standard rates while their counterparts such as Plot Loans or NRI Home Loans usually have a higher rate of interest.
- External benchmark rate: As per RBI’s notification, housing loan interest rates sanctioned by banks from October 2019 are linked to external benchmark rates like the RBI Policy Repo Rate, the Government of India 3-Months and 6-Months Treasury Bill yields published by Financial Benchmarks India Private Ltd (FBIL) and any other benchmark market interest rate published by FBIL. Under the new regime, any change in the external benchmark rate will affect the home loan interest rate of all banks in India.
- The lesser interest rate for women home loan borrowers: Most banks provide concession on home loans, typically 0.5% lesser interest rate, to women borrowers. Hence, it is advised that married couples should consider taking a joint-home loan and make the wife the primary applicant if they can get a lower rate of interest. Availing joint home loan will also increase your home loan eligibility as well as home loan tax benefits.
- Type of interest rate: Home loan rate of interest is of two types – fixed and floating. The type of interest rate you choose for your home loan will determine the rate at which you will repay your lender. In the case of fixed-rate home loans, EMIs remain the same for the entire loan period. Floating rates, on the other hand, change as per change in its lending rate such as Repo Linked Lending Rate (RLLR). Lenders usually charge higher interest rates on home loans offered on fixed interest rates due to the higher interest rate risk involved with fixed-rate home loans.
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FAQs
Q. What is today’s home loan interest rate?
A. Home loan interest rate today is 6.40% p.a. onwards. The final rate of interest at which your lender will give you a home loan will depend on multiple factors including your credit score, repayment capacity, loan amount, and age.
Q. Which bank offers the lowest home loan rates?
A. Union Bank of India, Bandhan Bank, and Bank of Maharashtra offer home loans at the lowest rate of interest starting at 6.40% per annum, which currently is the best home loan interest rate in India. Following these banks are Bank of Baroda and Kotak Mahindra Bank, which currently are offering housing loans starting at 6.50% and 6.55% p.a., respectively. Other lenders that offer home loans at low-interest rates include LIC Housing Finance, State Bank of India, HDFC Ltd., ICICI Bank, and Bajaj Finserv.
Q. Which bank offers the lowest home loan rate of interest for salaried and self-employed?
A. Union Bank of India, Bank of Maharashtra, and Bandhan Bank offer the lowest home loan interest rate for salaried individuals starting at 6.40% p.a. For self-employed individuals, Union Bank of India offers the lowest home loan interest rate starting at 6.50% p.a.
Q. How to reduce home loan interest burden?
A. Following are the few effective ways to reduce home loan interest burden:
- Transfer your existing loan to another bank offering a home loan at a lower interest rate
- Increase your home loan EMIs or reduce the loan tenure to reduce the total interest payable
- Part-prepay your home loan to decrease EMIs and save on interest
Q. What factors determine home loan interest rates?
A. Factors responsible for the increase or decrease in the housing loan interest rates in India include credit score, loan amount, type of employment, total income, interest rate type, gender of the applicant, home loan type, and external benchmark rate.
Q. How to get the cheapest home loan in India?
A. There is no set formula to avail housing loans at the lowest interest rate. However, there are a few practices that can help you avail of the lowest housing loan rate possible. Some of these practices are:
- Keep credit score close to 900: Your credit score shows how well you handled your credit in the past. As per RBI guidelines, banks now use it upfront to fix home loan Interest rates over and above the external benchmark rate. Since a high credit score reflects responsible credit behavior and vice-versa, applicants with a lower credit score will pay higher interest on their home loans. And, applicants with a higher credit score will enjoy lower rates.
- Apply for a joint home loan: You can get the cheapest home loan interest rates if you apply for a home loan jointly with your wife and make her the primary applicant for your home loan. Most of the banks provide interest concession home loans to women on an interest rate that is less than 0.5% of the general home loan interest rate. Availing joint home loan will also increase your home loan eligibility as well as home loan tax benefits.
- Refinance your home loan: Apply for a home loan balance transfer if your current bank or financial institution is charging a higher rate of interest. You can switch to another bank, which offers a lower rate of interest. But before making the switch, consider the total cost of the loan transfer.
Know: When should you go for a home loan balance transfer facility?
- Increase home down payment: Loan amount is yet another factor that affects your home loan rate. For lenders, as the home loan amount increases, the associated credit risk also increases. To accommodate the increased risks, lenders levy a higher rate of interest. So, customers striving to avail of home loans at the lowest interest rate possible should try borrowing less by contributing more towards their home down payment.
Q. Which one offers home loans at a lower rate of interest – Banks or HFCs?
A. Banks, usually, offer home loans at a lower rate of interest than Housing Finance Companies (HFCs). However, the eligibility criteria for home loans from banks are often more stringent than that of HFCs.
Which bank will be the best to avail home loan depends on your loan requirements. Some of the tips that can help you choose the best home loan offer are as follows:
- Know how much loan amount you can afford to borrow with the help of a home loan eligibility calculator
- Compare home loan interest rates from the eligible offers. Opt for a lender offering home loans at the lowest interest rates
- Compare other fees applicable on home loans such as the processing fees and prepayment charges
- Check if the lender offers a prepayment facility, customized home loan insurance scheme, online account access, etc.
- Also, check for different loan repayment options
Q. How to calculate home loan interest rates?
A. You can calculate home loan interest rates using a home loan EMI calculator, which mainly calculates EMIs but also displays the total interest payable on your housing loan. The online home loan calculator also displays the total amount payable on your home loan along with an amortization schedule, which is a detailed breakup of your home loan repayment schedule and helps you know how much interest needs to be paid towards your home loan.