Home Loan Interest Rates

Bank of India now has the lowest home loan interest rate, beginning at 8.30% per annum. Next, Bank of Baroda, Canara Bank, SBI, and Union Bank of India are available, with interest rates starting at 8.40% p.a. for home loans. The ultimate interest rates given to applicants for home loans would be determined by their credit score, loan amount, employment history, etc. Prospective borrowers should evaluate the interest rates given by as many lenders as they can before submitting a loan application because even a small change in the interest rate can result in a large difference in the overall interest cost for the borrower of a home loan.

Interest rates on home loans offered by the most reputable housing finance companies

Name of HFCs	Current Interest rates
LIC Housing Finance	8.50% onwards
GIC Housing Finance	8.80% onwards
Indiabulls Housing Finance	8.75% onwards
Aditya Birla Capital	8.80% onwards
Tata Capital	8.70% onwards
Bajaj Housing Finance	8.45% onwards
PNB Housing Finance	8.50% onwards
ICICI Home Finance	9.20% onwards
Godrej Housing Finance	8.55% onwards
L&T Finance Limited	8.60% onwards
Repco Home Finance	9.50% onwards

 

Interest rates on home loans offered by the most reputable Private Sector Banks

Name of Private Sector Bank	Current Interest rates
Karur Vysya Bank	9.23% onwards
South Indian Bank	9.57% onwards
HDFC Bank Ltd.	8.50% onwards
Kotak Mahindra Bank	8.70% onwards
ICICI Bank	9.00% onwards
Axis Bank	9.00% onwards
Bandhan Bank	9.15% onwards
RBL Bank	9.15% onwards
Tamilnad Mercantile Bank	9.45% onwards
Karnataka Bank	8.75% onwards
Federal Bank	8.80% onwards
Dhanlaxmi Bank	9.35% onwards

 

Interest rates on home loans offered by the most reputable Public Sector Banks

Name of Public Sector Bank	Current Interest rates
Bank of India	8.30% onwards
UCO Bank	8.45% onwards
Bank of Baroda	8.40% onwards
Punjab National Bank	8.55% onwards
Punjab & Sind Bank	8.50% onwards
State Bank of India	8.40% onwards
Canara Bank	8.50% onwards
Indian Overseas Bank	8.85% onwards
Union Bank of India	8.40% onwards
Bank of Maharashtra	8.50% onwards

Please note: Rates of interest as of October 22nd, 2023

The components affecting your home loan's interest rate

Home loans are often large-ticket loans, therefore banks and HFCs carefully and thoroughly evaluate the borrower's credit history, repayment capacity, and income in addition to doing rigorous checks on the property being acquired. Borrowers who are applying for a house loan need to be fully informed of their personal eligibility as well as the criteria that lenders use to evaluate applications. It should be noted that tougher eligibility requirements frequently accompany low-interest rates. Here are the variables that lenders take into account to decide if you qualify for a home loan and the interest rate that will be given.

Differential interest rate: Your ability to repay your lender will depend on the type of interest rate you select for your home loan. Home loans with fixed rates have constant EMI payments for the course of the loan. On the other hand, floating rates fluctuate in accordance with changes in its lending rate, such as the Repo Linked Lending Rate (RLLR). Due to the higher interest rate risk associated with fixed-rate house loans, lenders typically demand higher interest rates on those loans.

Interest rate cut for female homeowners: Some lenders give female customers an interest rate discount on home loans, often about 0.05%. Therefore, it is advisable that married couples think about taking up a joint mortgage and designating the wife as the primary applicant if they can do so and achieve a cheaper interest rate. Your eligibility for a house loan and the tax benefits associated with it will both improve if you take out a joint mortgage.

Credit score rating: A numerical representation of your credit history is your credit score. A good credit score is more likely to be held by people who have paid their EMIs and credit card payments in whole and on time in the past and who haven't been overly reliant on credit. Lenders will view you favourably for a house loan if your credit score from CIBIL and other bureaus is 750 or above. Additionally, banks and HFCs are progressively setting their house loan interest rates based on the applicants' credit scores. Many banks and HFCs provide home loans to applicants with higher credit scores at a cheaper interest rate because they believe that a high credit score demonstrates prudent credit behaviour and financial discipline.

Different Type of home loan: The interest rate on house loans varies depending on the type of loan. While Plot Loans and NRI Home Loans typically have higher interest rates than regular home loans, regular home loans have normal rates.

Employment and income: Lenders consider your income, your employment status, and the characteristics of your employer when determining your eligibility for a house loan. Due of their increased job/income certainty, candidates for home loans who work for the government, PSUs, large and/or reputable private sector enterprises, or both, are typically preferred by lenders. As a result, lenders provide such candidates lower home interest rates. On the other side, candidates for house loans with erratic or insufficient income may have difficulty obtaining a loan with a reduced interest rate.

Sum borrowed: The loan amount you choose to take out may also have an impact on the interest rate you pay for your mortgage. Compared to home loans for larger sums, home loans up to Rs. 30 lakh often offer cheaper interest rates. Make the largest down payment feasible if you want to get a lower interest rate on your mortgage. This will not only lessen their overall debt load but could also result in a cheaper interest rate.

Different Types of Home Loan Interest Rates

There are three different forms of home loans: hybrid, floating-rate, and fixed-rate.

Hybrid Loans : Home loans with hybrid rates combine fixed-rate and floating-rate loans. For a predetermined amount of time, they will initially have a fixed interest rate; after that, it will switch to a fluctuating rate of interest. These mortgages are most suitable for borrowers who obtained the loan at a low fixed rate and intend to prepay the loan in full or foreclose on it before the floating rate kicks in.

Floating Rate Loans : A floating interest rate, sometimes referred to as a variable rate of interest, is one that fluctuates during the course of a loan since it is dependent on current market lending rates. According to changes in interest rates, home loan EMIs will either rise or fall.

Fixed Rate Loans : The fixed interest rate stays the same during the course of the loan, maintaining the home loan EMI's stability. When the present house loan rate of interest is relatively low and an upward trend is predicted in the future, it is best to apply for a home loan with a fixed rate of interest.