Home Loan Interest rates of All Banks
Are you looking for the best home loan programme to help you buy your dream home?
- The good news is that COVID-19 instances have fallen dramatically in recent months, just in time for the Christmas season of 2021. Banks have begun to offer incentives such as lower home loan interest rates and no processing fees. The interest rate has dropped to as low as 6.5 percent per year, and the real estate sector has benefited from the much-needed growth spurt brought on by increasing house buyer involvement.
- The interest rate on your home loan is possibly the most crucial component that can have a big impact on the entire cost of your home. Because home loans are typically greater in value and are long term, even a little change in interest rate can have significant financial repercussions, especially over time. Obtaining a lower home loan rate will reduce not just your monthly EMIs, but also the total amount of interest paid on your loan. As a result, if you're looking for a house loan, you must compare all of your options and choose the one with the lowest interest rate.
- Kotak Mahindra Bank now has the lowest home loan interest rate at 6.50 percent p.a., followed by Punjab National Bank, Punjab and Sind Bank, ICICI Bank, Bajaj Finserv, Bank of Baroda, State Bank of India, Union Bank of India, and HDFC Ltd.
Home loan interest rates of all banks 2021
Here is the compiled table of home loan interest rates list of all banks in 2021.
Banks | Starting Interest Rate (p.a.) | Processing Fees |
Kotak Mahindra Bank | 6.50% | 0.50% |
Citibank | 6.75% | Rs. 10,000 |
Union Bank of India | 6.80%* | - |
Bank of Baroda | 6.75% | Rs. 8,500 - Rs. 25,000 |
Central Bank of India | 6.85% | Rs. 20,000 |
Bank of India | 6.85% | Rs. 1,500 - Rs. 20,000 |
State Bank of India | 6.75% | 0% - 0.35% |
HDFC LTD | 6.70%* | Rs. 3,000 - Rs. 5,000(plus taxes)* |
ICICI Bank | 6.90% | Rs. 3,000 |
LIC Housing Finance | 6.90% | Rs. 10,000 -Rs. 15,000 |
Axis Bank | 6.90% | Rs. 10,000 |
Canara Bank | 6.90% | Rs. 1,500 - Rs. 10,000 |
Punjab and Sind Bank | 6.85% | Full Waiver |
IDFC First Bank | 6.90% | Rs. 5,000 - Rs. 5,000 |
Bank of Maharashtra | 6.90% | Rs. 10,000 |
Indian Overseas Bank | 7.05% | 0.50% (Max Rs. 20,000) |
Punjab National Bank | 6.95% | 0.35% (Max Rs. 15,000) |
United Bank of India | 8.00% | 0.59% (Rs. 1,180 - Rs. 11,800) |
UCO Bank | 6.90% | 0.15% (Rs. 1,500 - Rs. 15,000) |
DBS Bank | 7.30% | 0.25% (Rs. 10,000) |
IDBI Bank | 6.95% | 0.50% (Rs. 2,500 - Rs.5,000) |
HSBC Bank | 6.64% | 1% (Rs. 10,000) |
Karur Vysya Bank | 7.20% | Rs. 5,000 |
Saraswat Bank Home Loan | 6.70% | Nil |
Jammu and Kashmir Bank | 7.20% | Rs. 500 - Rs. 10,000 |
South Indian Bank | 7.85% | 0.50% (Rs. 5,000 - Rs. 10,000) |
PNB Housing Finance | 7.20% | 0.25% - 0.50% (Rs. 10,000) |
Federal Bank | 7.65% | Rs. 3,000 - Rs. 7,500 |
Standard Chartered Bank | 7.99% | 1% |
Aavas Financiers | 8.00% | 1.00% |
Karnataka Bank | 7.50% | Rs. 250 |
Sundaram Home Finance | 6.95% | Rs.3,000 (for salaried) |
Dhanlaxmi Bank | 7.85% | Rs. 10,000 |
Tata Capital | 6.90% | 0.50% |
Tamilnad Mercantile Bank | 8.25% | Rs. 15,000 |
IIFL | 10.50% | 1.25% |
DHFL Housing Finance | 8.75% | Rs. 2500 |
Bandhan Bank | 8.50% | 1% (Rs.5,000) |
Yes Bank | 8.95% | 1% (Rs. 10,000) |
Hudco Home Loan | 9.45% | NA |
Indiabulls | 8.65% | 2% |
Aditya Birla | 9.00% | 1% |
GIC Housing Finance | 7.45% | Rs. 2,500 |
Reliance Home Finance | 9.75% | Rs. 3,000 - Rs. 6,500 |
Shriram Housing | 8.90% | NA |
India Shelter Finance | 12.00% | 2.00% |
How to get a low interest rate home loan in 2021
- Because home loans are typically large loans, banks and NBFCs examine the borrower's credit history, repayment capacity, and income, as well as conducting thorough inspections of the property to be purchased. Borrowers seeking a home loan should be aware of the criteria lenders consider when processing an application and have a thorough understanding of their own eligibility. It's worth noting that low interest rates are frequently accompanied by stringent eligibility requirements. The following elements are considered by lenders when determining your eligibility for a home loan and the interest rate that will be offered:
- Credit score: Your credit score is based on your previous credit behaviour. Those with a solid credit score have paid their EMIs and credit card bills in full and on time, and have not been overly reliant on credit in the past. Lenders will consider you for a house loan if your credit score from CIBIL and other bureaus is 750 or above. In addition, banks are now using an applicant's credit score to determine the interest rate on a house loan, in addition to the external benchmark rate, as per RBI recommendations. Because a good credit score indicates responsible credit behaviour, candidates with great credit might obtain house loans at a lower interest rate. Even if the loan is taken by a single co-owner, the credit score of each co-owner is likely to be verified by the lender if the residence has a co-ownership.
- Income and employment: Your income, type of employment, and employer profile are all important factors that lenders consider. Lenders favour home loan applicants who have a secure job with a large and reputable company, such as an MNC, or who work for the government. On the other side, obtaining a Home Loan at a reduced rate of interest may be challenging if you are self-employed with inconsistent revenue flows, have an unsteady job profile, or have just begun your professional adventure.
- Loan amount: The amount of money you want to borrow can affect the interest rate you obtain on a home loan. Interest rates on home loans up to Rs. 30 lakh are often cheaper than those on larger loans. To get a better interest rate on your house loan, you should strive to put down as much money as feasible. This will not only help them pay off their debt faster, but it may also help them secure a reduced interest rate.
- Type of home loan: Home loan interest rates vary depending on the type of loan. Regular home loans have regular interest rates, whereas plot loans and NRI home loans typically have higher interest rates.
- Housing loan interest rates will be linked to external benchmark rates, such as 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, beginning in October 2019. Any change in the external benchmark rate will affect the home loan interest rate of all Indian banks under the new system.
- Women's house loan borrowers get a lower interest rate: Most banks provide women borrowers a 0.5 percent lower interest rate on their home loans. As a result, married couples may consider taking out a combined house loan and designating the wife as the principal applicant if they can receive a cheaper interest rate. A shared house loan will boost your eligibility for a home loan as well as your home loan tax benefits.
- Fixed and floating interest rates are the two types of interest rates available for home loans. The rate at which you repay your lender will be determined by the sort of interest rate you chose for your home loan. The EMIs on fixed-rate home loans remain the same throughout the loan term. Floating rates, on the other hand, fluctuate following changes in the lending rate, such as the Repo Linked Lending Rate (RLLR).
Types of Home Loan Interest Rates
The majority of banks charge two different types of home loan interest rates.
1. Fixed Interest Rate:
- The rate remains constant in this system of calculation throughout the loan term. Because the interest rate is fixed, there will be no change in the interest costs. Depending on the offer, you may be able to switch to a floating rate scheme once a set time has passed on your loan.
- Advantage: Because the rate is set, you know exactly how much interest you'll pay upfront. If lending rates rise, your loan will be protected from frequent rate swings, saving you money in the long term.
- You will not benefit if normal loan rates decline because the interest component remains frozen.
2. Floating Interest Rate:
- The interest costs on your house loan are determined by the bank's current most lending rates. The rate is connected to the bank's most recent stated rate, which is influenced by several factors including the RBI's monetary policy and lending rate changes, the bank's reaction to the revision, and so on.
- Advantage: The most obvious benefit of choosing a variable rate is that you will be invoiced according to the most recent rate. You save money on interest charges if interest rates fall.
- Disadvantage: In the unlikely event that standard rates rise, the loan must suffer the burden of the increased rate.
- However, on the first front, floating home loan interest rates are less expensive than fixed home loan interest rates.
Frequently asked questions
What is the interest rate on a home loan?
The proportion of the principal amount charged by the lender to the borrower for using the principal amount is known as the home loan interest rate. The cost of your house loan is determined by the interest rate set by banks and non-financial organisations. The interest rate levied influences how much you have to pay your lender against your loan every month when you pay your home loan EMI (equated monthly payment). Interest rates are normally tied to the repo rate, however, they might differ from one lender to the next.
Which bank offers the lowest interest rate on house loans?
Though interest rates offered by banks might change at any time, Kotak Mahindra Bank is now offering its customers the lowest home loan interest rate of 6.50 percent per annum.
How can you lower your home loan interest rate?
Reduced interest on your home loan will help you pay your EMIs more easily. There are various options available to you that will assist you to lower your loan interest rate.
- Choose a shorter term — While the EMI on a long-term loan is lower, the total cost of the loan rises dramatically because you are paying interest for a longer length of time. As a result, consider shorter terms because the interest rate will drop dramatically over time. When comparing long-term and short-term home loans, use an EMI calculator.
- Make regular prepayments — During the first few years of your house loan, you will be paying more interest and less principal. As a result, making prepayments on your mortgage will eventually reduce your outstanding principal, lowering your interest rate. Some banks, however, demand a fee for loan prepayments, especially on fixed-rate loans.
- Balance transfer — Choose this option only if you believe your present lender is charging you a higher interest rate than other lenders. Most banks offer home loan balance transfer services, which allow you to move your loan account to a bank with a reduced interest rate.
What is the relationship between the risk weighting of a home loan and the LTV ratio?
The fraction of the property cost that the bank will finance while the remainder is paid by the homebuyer is referred to as the loan-to-value ratio. The majority of banks will finance up to 90% of the property's cost. Depending on the loan amount, this percentage may change. LTVs are commonly used by lenders to judge how hazardous a loan is and whether to approve or deny it. The risk weightage is 35 percent for loans up to Rs.30 lakh with an LTV ratio of less than 80 percent. Similarly, if the LTV ratio is between 80 and 90 percent for the same amount, the risk weightage is 50 percent. The risk weightage is 50% for home loans of more than R.s75 lakh and an LTV ratio of more than 75%.
How can I find out how much interest I have to pay on my home loan?
To figure out how much interest you'll pay on your house loan, use an EMI calculator. Simply input the loan amount, term, and rate of interest. You'll be able to see not only your EMI but also a thorough breakdown of your repayment timeline via an amortisation table once you've completed the calculation. You can check how much interest you've paid on your loan by looking at the amortisation table, which represents your repayment plan.