Home loan interest rate is one of the key factors that determines the cost of borrowing. A lower housing loan interest rate is always preferred as it lowers the total interest payout for the borrower. Today’s lowest home loan rate is 6.70% p.a. offered by the Union Bank of India.
Compare home loan interest rates and processing fees from top lenders and apply for the best home loan offer. Below is the list of current home loan interest rates from leading Banks, Non-banking Financial Companies and Housing Finance Companies in India.
Current Home Loan Interest Rates for All Banks July 2020
| Banks/NBFCs/HFCs | Min. Home Loan Interest Rate* | Processing Fees (exclusive of GST) |
| Aditya Birla Housing Finance Ltd. | 9.00% (Linked to ARR) | Up to 1% of the loan amount |
| Axis Bank | 7.75% (Linked to RLLR) | Up to 1% of the loan amount (Min. Rs. 10,000) |
| Bajaj Finserv** | 8.10% (Linked to BFL FRR) | For salaried individuals: Up to 0.80% For self-employed individuals: Up to 1.20% |
| Bank of Baroda | 6.85% (Linked to RLLR) | 0.25% – 0.50% of loan amount (Min. Rs. 8,500 & Max. Rs. 25,000) |
| Bank of India | 6.85% (Linked to RLLR) | 0.25 % of loan amount (Min. Rs. 1,500; Max. Rs. 20,000) |
| Canara Bank | 6.90% (Linked to RLLR) | 0.50% (Min. Rs. 1,500; Max. Rs. 10,000) |
| Central Bank of India | 6.85% (Linked to RLLR) | 0.50% of loan amount (Max. Rs. 20,000) |
| DHFL | 9.50% (Linked to RPLR) | Salaried/Self Employed Professional – Rs. 2,500 – Rs. 20,000 Self Employed Non Professional – Net PAT: 0.5%, Others: 1.5% |
| Federal Bank | 8.15% (Linked to RLLR) | 0.50% of loan amount (Min. Rs. 3,000; Max. Rs. 7,500) |
| Fullerton Grihashakti | 8.99% (Linked to RPLR) | Up to 3% of the loan amount |
| HDFC Bank | 6.95% (Linked to RPLR) | Up to 0.5% of loan amount or Rs. 3,000, whichever is higher |
| Home First Finance Company | 11.90% (Linked to Repo Rate) | Rs. 9,990 to Rs. 21,990 |
| ICICI Bank | 6.95% (Linked to RLLR) | 0.50% of loan amount |
| IDBI Bank | 7.80% (Linked to RLLR) | Rs. 2,500 – Rs. 5,000 |
| IDFC First Bank | 7.00% (Linked to Repo Rate) | Up to Rs. 10,000 (additional premium is charged based on risk profile) |
| IIFL | 8.70% (Linked to PLR) | Up to 1.75% of loan amount |
| Indiabulls Housing Finance | 8.99% | Up to 2% of loan amount |
| India Shelter Finance Corp. Ltd. | 13.00% | 2% – 3% of loan amount |
| Indian Overseas Bank | 7.45% (Linked to RLLR) | Up to 1.20% of the loan amount |
| Kotak Mahindra Bank | 7.35% (Linked to MCLR) | Up to 2% of loan amount |
| LIC Housing Finance | 7.50% (Linked to PLR) | As applicable |
| PNB Housing Finance | 8.60% (Linked to PNBHFR) | Up to 1% of loan amount |
| Punjab & Sind Bank | 6.90% (Linked to RLLR) | Full waiver on processing & inspection charges |
| Punjab National Bank | 7.00% (Linked to RLLR) | 0.35% of loan amount (Min. Rs. 2,500; Max. Rs. 15,000) |
| State Bank of India (SBI) | 6.95% (Linked to RLLR) | 0.40% of loan amount (Min. Rs. 10,000; Max. Rs. 30,000) |
| Standard Chartered Bank | 8.86% | Up to 1% of loan amount |
| Tata Capital | 9.25% (Linked to RPLR) | 0.5% of the loan amount |
| UCO Bank | 7.15% (Linked to RLLR) | 0.5% of the loan amount (Min. Rs. 1500; Max. Rs. 15,000) |
| Union Bank of India | 6.70% (Linked to EBLR) | 0.50% of loan amount (Max. Rs. 15,000) |
| YES Bank | 9.85% (Linked to 6-month CD Rate) | 2% of loan amount or Rs. 10,000, whichever is higher |
Note: The home loan interest rate given in the table are subject to change anytime without prior notice.
** Promotional rate for loans up to Rs. 30 lakh. ARR: ABHFL Reference Rate; EBLR: External Benchmark Lending Rate; MCLR: Marginal Cost of funds based Lending Rate; RLLR: Repo Linked Lending Rate; TBLR: Treasury Bill Benchmark Linked Lending Rate; RPLR: Retail Prime Lending Rate; BFLFRR: Bajaj Finance Limited Floating Reference Rate; PLR: Prime Lending Rate; CD: Certificate of Deposit
Getting ready to buy a home? Find the best home loan offer in just a few clicks.
Besides home loan interest rates and loan amount, there are various other charges that make up the total cost of your home loan.
Understanding home loan fees & charges
Types of Interest Rates Offered on Home Loans
There are two types of home loan interest rates at which lenders sanction a home loan, fixed and floating.
Fixed Interest Rate – Fixed interest rates remain the same throughout the loan tenure. For instance, if you get a home loan at 10% p.a. for a period of 15 years, the interest rate will not change till the end of your loan period. However, lenders allow their customers to switch over to the variable/floating housing loan interest rates after completing a specific period of time.
Floating Interest Rate – Floating interest rate, also known as the variable rate of interest, is subject to the latest lending rates of the bank. Unlike the fixed rate of interest, floating interest rates may change during the loan tenure. The rate is dependent on various factors such as RBI’s monetary policies and revised MCLR or other external benchmark rates.
Suggested Read: Fixed Rate vs. Floating Rate – Which one is better?
Change in home loan rate? Use home loan EMI calculator to know its effect on your EMIs
The online loan calculator also works as a home loan interest rate calculator as it helps you know the interest amount due on your home loan along with the overall EMI amount.
What Factors Affect Home Loan Interest Rates?
Factors responsible for the increase or decrease in the housing loan interest rate in India are:
- Credit score:Credit score is now used upfront by lenders to fix home loan interest rates over and above the external benchmark rate. Lower credit score attract a higher rate of interest on home loan and vice-versa.
- Loan amount:The loan amount you wish to borrow can also influence the rate at which you get the housing loan. Home loans up to Rs. 30 lakh usually have lower interest rate as compared to home loans of a higher amount.
- Type of employment:The home loan interest rate for salaried professionals is lower than the interest rate charged for self-employed professionals. This is so because the income of salaried employees is stable. In case of self-employed, the income is dependent on market conditions and other external factors.
- 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 it to your lender. In 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).
- Gender of the applicant:Many lenders such as the SBI offer a fixed concession on home loan interest rates for women borrowers. Such banks offer a concession of 0.5 bps for women borrowers on the prevailing interest rates.
- 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 its counterparts such as Plot Loans or NRI Home Loans usually have higher rate of interest.
- External benchmark rate:As per RBI’s notification, from October 2019, housing loan interest rates are linked to external benchmark rates such as 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.
Read Also: Will Reduction in Repo Rate Lower Your Home Loan EMIs?
How is Home Loan Interest Rate Calculated?
The method of calculating the home loan rate or effective interest rate is simple and straight forward. Under floating rate home loans, banks specify a formula, which may be external benchmark rate such as Repo Rate and 3-month Treasury Bill Rate plus a given spread. Adding the two of these components will give you the effective home loan interest rate.
Effective Interest Rate (EIR) = Base Rate + Markup
Let’s know more about these two components:
External Benchmark Rate: It is the minimum rate set by the Reserve Bank of India (RBI). Lenders cannot sanction loan to customers below this rate. It can be linked to RBI’s repo rate or any other benchmark market interest rate published by the Financial Benchmarks India Private Limited (FBIL). It is also subject to frequent changes depending on various inputs.
Read Also: How is RLLR different from MCLR?
Markup/Spread: Spread or margin is added over and above the external benchmark rate to get the Effective interest rate (EIR). The spread may vary from one home loan scheme to another.
Which bank offers the lowest interest rate on home loan?
Union Bank of India offers the lowest home loan interest rates starting from 6.70% p.a. Given below is the table of top banks offering lowest housing loan interest rates in India.
| Bank | Min. Interest Rate | EMI/lakh** | Processing Fee* |
| Union Bank of India | 6.70% p.a. | Rs. 645 | 0.35% of the loan amount (Min. Rs. 2,500; Max. Rs. 15,000) |
| Bank of Baroda | 6.85% p.a. | Rs. 655 | 0.25% – 0.50% of loan amount |
| Bank of India | 6.85% p.a. | Rs. 655 | 0.25 % of loan amount (Min. Rs. 1,500; Max. Rs. 20,000) |
| Central Bank of India | 6.85% p.a. | Rs. 655 | 0.50% of loan amount |
| Canara Bank | 6.90% p.a. | Rs. 659 | 0.5% of loan amount (Min. Rs. 1,500; Max. Rs. 10,000) |
| State Bank of India | 6.95% p.a. | Rs. 662 | 0.35% – 0.50% of loan amount (Min. Rs. 2,000; Max. Rs. 10,000) |
| Punjab National Bank | 7.00% p.a. | Rs. 665 | 0.35% of loan amount (Min. Rs. 2,500; Max. Rs. 15,000) |
*GST as applicable
**To calculate Home Loan EMI, the loan tenure is assumed as 30 years.
Click for home loan interest rates comparison
How to get home loan at lowest interest rate in India?
There is no set formula to avail housing loan at the lowest rate. However, there are a few practices which can help you avail lowest home loan rate possible. Some of these practices are:
- Keep Your Credit Score Close to 900
Your credit score is an indicator of your creditworthiness. As per RBI guidelines, banks now use it upfront to fix home loan rate of interest over and above the external benchmark rate. Since, high credit score reflects responsible credit behaviour and vice-versa, applicants with lower credit score will pay higher interest on their home loans. And, applicants with higher credit score will enjoy lower rates.
- Apply for Home Loan Jointly
You can get the lowest housing loan rate if you apply for home loan jointly with your wife and make her the primary applicant of your home loan. Most of the banks provide interest concession home loan to women on an interest rate which 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.
Check Also: Home Loan Tax Benefits
- Consider Availing Home Loan Balance Transfer
You can even opt 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 loan transfer. Click to know when should you go for home loan balance transfer facility.
- Increase Your Home Downpayment
Loan amount is yet another factor that affects your home loan rate. Higher loan amount usually attracts higher interest rate and vice-versa. To get home loan at the lowest possible interest rate, try reducing your loan amount by contributing more towards your home down payment.
How to reduce home loan interest burden?
Following are the few effective ways to reduce home loan interest burden:
- Transfer your existing loan to another bank offering home loan at lower interest rate
- Increase your home loan EMIs to reduce the total interest payable
- Part-prepay your home loan to decrease EMIs and save on interest
FAQs
Q. What is the current interest rate for home loans today?
A Home loan interest rate today is 6.70% onwards. The final rate of interest which you will get on your home loan will depend on multiple factors including your credit score, repayment capacity, loan amount and age.
Q. What is home loan interest rate offered by SBI and HDFC Bank?
A The latest home loan interest rate offered by both SBI and HDFC Bank is 6.95% onwards.
Q. What is the EMI for 20 lakhs Home Loan?
A The EMI for 20 lakhs loan at the latest Home Loan interest rate of 6.85% for the tenure of 30 years is Rs. 655.26.
Q. How to calculate home loan interest?
A Use home loan EMI calculator to calculate home loan interest amount. The calculator also tells you about your home loan EMIs and total principal amount. To get the results, all you need to provide are a few details, loan amount, interest rate and loan tenure.
Q. Which bank is the best to avail home loan?
A 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 lowest interest rates
- Check and compare other fees and charges applicable on home loans such as the processing fees and prepayment charges
- Check if the lender offers prepayment facility, customized home loan insurance scheme, online account access, etc.
- Also, check for different loan repayment options
Q. Which are the top banks/HFCs offering home loan in India?
A Given below is the table of top lenders offering home loan in India:
- State Bank of India (SBI)
- HDFC Ltd.
- Bajaj Housing Finance Ltd.
- ICICI Bank
- LIC Housing Finance Ltd.
- Axis Bank
- Bank of Baroda
- Kotak Mahindra Bank
- Aditya Birla Housing Finance Ltd.
- IDFC First Bank
