Home Loan Interest Rates 2020

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Updated: 27-01-2020 11:16:01 AM

Availing home loan at the lowest interest rate can help you save substantially on your total loan cost. Currently, the State Bank of India (SBI) and Punjab National Bank (PNB) offer the lowest home loan interest rates starting from 7.90% p.a. Read further to check current home loan interest rates from all leading Banks and Housing Finance Companies (HFCs) in India (as updated on 23 January 2020).

Compare Home Loan Rates from All Banks & HFCs in India

Home Loan ProvidersHome Loan Interest RatesProcessing Fees (exclusive of GST) 
Allahabad Bank8.20% onwards (Linked to EBLR)For loan amount up to Rs.1 crore – 0.40% of loan amount (Max. Rs.15,000)
For loan amount above Rs.1 crore – 0.24% of loan amount (Max. Rs.50,000)
Axis Bank8.55% onwards (Linked to RLLR)Up to 1% of the loan amount (Min. Rs. 10,000)
Bank of Baroda8.15% onwards (Linked to RLLR)Up to Rs.50 lakh: 0.50% of loan amount (Min. Rs.8,500 & Max. Rs.15,000)
Above Rs. 50 lakh: 0.25% of loan amount (Min. Rs. 8,500 & Max. Rs. 25,000)
Bajaj Finserv**8.55% onwards (Linked to BFL FRR)For salaried individuals: Up to 0.80%
For self-employed individuals: Up to 1.20%
Bank of India8.1% onwards (Linked to RLLR)0.25 % of loan amount (Min. Rs. 1,500; Max. Rs. 20,000)
Canara Bank8.05% onwards (Linked to RLLR)0.5% (Min. Rs. 1,500; Max. Rs. 10,000)
Central Bank of India8.0% onwards (Linked to RLLR)0.50 – 1% of loan amount
Citibank8.07% onwards (Linked to TBLR)Up to 0.40% of the loan amount
DBS BankUp to 8.95% (Linked to RLLR)Up to Rs. 10,000
DHFL9.75% onwards (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 Bank8.55% onwards (Linked to RLLR)0.50% of loan amount (Min. Rs. 3,000; Max. Rs. 7,500)
HDFC Bank8.00% onwards (Linked to RPLR)Up to 0.5% of loan amount or Rs. 3,000, whichever is higher
ICICI Bank8.25% onwards (Linked to RLLR)1.00% – 2.00% of loan amount or Rs. 1,500 (Rs. 2,000 for Mumbai, Delhi & Bangalore), whichever is higher
IDBI Bank8.25% onwards (Linked to RLLR)Rs. 2,500 – Rs. 5,000
IDFC First Bank8.15% onwards (Linked to RLLR)Up to Rs. 10,000
IIFL8.70% onwards (Linked to PLR)Up to 1.75% of loan amount
Indiabulls Housing Finance8.99% onwardsUp to 2% of loan amount
India Shelter Finance Corp. Ltd13.00% onwards2% – 3% of loan amount
Indian Overseas Bank8.20% onwards (Linked to RLLR)Up to 1.20% of the loan amount
Kotak Mahindra Bank8.60% onwards (Linked to MCLR)Up to 2% of loan amount
LIC Housing Finance8.10% onwards (Linked to PLR)As applicable
Punjab National Bank7.90% onwards (Linked to RLLR)0.35% of loan amount (Min. Rs. 2,500; Max. Rs. 15,000)
PNB Housing Finance9.25% onwards (Linked to PNBHFR)Up to 1% of loan amount
Reliance Home Finance9.75% onwards (Linked to PLR)Up to 2% of loan amount
State Bank of India (SBI)7.90% onwards (Linked to RLLR)0.35% – 0.50% of loan amount (Min. Rs. 2,000;  Max. Rs. 10,000)
Standard Chartered Bank9.21% onwardsUp to 1% of loan amount
Syndicate Bank7.85% onwards (Linked to RLLR)0.50% – 1.25% of loan amount
Tata Capital9.25% onwards (Linked to RPLR)0.5% of the loan amount
United Bank of India8.00% onwards (Linked to RLLR)0.59% of loan amount (Min. Rs.1,180; Max. Rs.11,800) [Waived up to 31.03.2020]
YES Bank9.85% onwards2% of loan amount or Rs. 10,000, whichever is higher

Note: The home loan rates given in the table are subject to change anytime without prior notice.
** Promotional rate for loans up to Rs. 30 lakh. 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

Read Also: How is RLLR different from MCLR?

Besides interest rates and loan amount, there are various other charges that make up the total cost of home loan. Click here to learn what other fees and charges are applicable on home loan

Check Eligibility & Apply for best Home Loan Offers

Home Loan EMI Calculator
What factors affect the home loan interest rate?
How to get home loan at lowest interest rate?
What are the different types of home loan interest rates?
How to calculate home loan interest rate?
Which bank offers lowest interest rate on home loan?
What is the current home loan interest rate?
To get a home loan, which type of interest rate is better?
Which bank is the best to avail home loan?
Which are the top 10 home loan providers in India?

Home Loan EMI Calculator

Knowing your loan EMI beforehand not only helps in deciding the loan amount you can afford to borrow but also helps in planning your finances and repayment better. If you have found the best home loan rate, use Home Loan EMI Calculator to calculate your home loan EMI. The tool requires minimal details such as interest rate, loan amount and tenure to give results. 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. Click here to calculate your home loan EMI.

What factors affect the home loan interest rate?

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.
  • Income: 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.
  • Interest rate type: Home loan rate of interest is of two types – fixed and floating. The interest type you choose for your 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).

Read Also: Types of Home Loan

  • 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.
  • External benchmark rate: As per RBI’s notification, housing loan interest rates are linked to external benchmark rates such as Repo Rate from October 2019. Under the new regime, any change in the external benchmark rate will affect the home loan interest rate of all banks and HFCs in India.

Read Also: Will Reduction in Repo Rate Lower Your Home Loan EMIs?

How to get home loan at lowest interest rate?

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:

  • 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.

Check Also: Getting Home Loan with Low Credit Score

  • You can get the lowest housing loan interest rate if you opt to avail a home loan jointly with your wife and make her the primary applicant of your home loan. Most of the banks provide home loan to women on an interest rate which is less than 0.5% of the general home loan interest rate. This will also increase your home loan eligibility

Check Your Home Loan Eligibility

  • 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. To know when you should go for home loan balance transfer, click here.
  • 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.

Check Also: Home Loan Tax Benefits

What are the different types of home loan interest rates?

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 vs. Floating Rate – Which one to choose?

Home Loan Interest Rates FAQs

How to calculate home loan interest rate?

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.

Markup/Spread: Spread or margin is added over and above the external benchmark rate to get the Effective interest rate (EIR). The markup may vary from one home loan scheme to another.

What is the current home loan interest rate?

The current home loan interest rate starts from 7.90% onwards.

To get a home loan, which type of interest rate is better?

Home loan interest rates are mainly of two types, floating and fixed. Each has its own set of pros and cons. Which type of interest rate will work best for you pick depends on various factors such as the prevailing lending rates, the rate at which you got the loan, market conditions, etc. Make an informed decision with the help of the comparison given above.

Fixed Rate Home LoansFloating Rate Home Loans
Does not change throughout the loan tenureChanges based on the change in the lender’s benchmark rate
Slightly higher than floating ratesSlightly lower than fixed rates
Best for those who are comfortable with the prevailing rates and are reasonably sure the rates will rise in futureBest for those who are unsure of the movement of the interest rates or are reasonably sure the rates will fall in future
Prepayment penalty is applicablePrepayment penalty is not applicable

Which bank is the best to avail home loan?

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:

  • Check for the lowest home loan interest rate
  • Besides the interest rate, check for other fees and charges such as the processing fees and prepayment charges.
  • Check for the eligibility criteria
  • Check if the lender offers prepayment facility, customized home loan insurance scheme, online account access, etc.
  • Also, check for different loan repayment options

Check Also: Home Loan Prepayment Calculator

Which are the top 10 home loan providers in India?

The top 10 Providers for Home Loan in India are:

  1. State Bank of India (SBI)
  2. HDFC Bank
  3. ICICI Bank
  4. Punjab National Bank (PNB)
  5. Axis Bank
  6. Bank of Baroda
  7. Canara Bank
  8. Bank of India
  9. YES Bank
  10. Kotak Mahindra Bank

The above list of home loan providers is on the basis of their total assets as per the latest Balance Sheet available (as on 16 Dec, 2019), which are:

S.No.BanksTotal Assets
1SBI3,046,499.14
2HDFC Bank1,058,910.81
3ICICI Bank764,459.23
4PNB651,795.99
5Axis Bank640,730.77
6Bank of Baroda633,993.82
7Canara Bank570,558.91
8Bank of India483,764.84
9YES Bank313,950.95
10Kotak Mahindra Bank267,392.46

Individuals can also compare home loan providers on the basis of market capitalisation and current home loan rates.

Read Also: Most Popular Home Loan Providers in India for 2020

To read more Home Loan FAQs – Click here. You can also check Top 5 banks’ home loan interest rates

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