Here’re Top Offers In India’s Home Loan Market: Learn More

Staying up-to-date with home loan interest rates is crucial for new and existing borrowers. By doing so, borrowers can determine whether switching their loan to a different bank with lower rates is financially beneficial. Home loans typically have floating interest rates, which increase or decrease based on market fluctuations and the Reserve Bank of India’s (BI) repo rate hikes. Some banks offer fixed interest rates, which lock in a specific interest rate for a set period, but these rates may not remain the same throughout the loan’s duration. This article focuses on floating interest rates linked to the repo-linked lending rate (RLLR).

Interest on home loans can be calculated using three methods: annual reducing, monthly reducing, and daily reducing balance. With the yearly reducing method, the principal amount decreases at the end of the year, so you keep paying interest on a portion of the principal you have already paid back. With the monthly reducing method, the principal amount decreases each month as you pay your equated monthly instalments (EMIs). Finally, with the daily reducing method, the principal amount decreases once your EMI is paid, and interest is calculated based on days. The State Bank of India (SBI) uses the daily reducing method.

Home Loan Rates of Public Sector Banks

Here are a few banks offering the lowest rates on home loans. According to paisabazaar.com data, the Bank of Maharashtra currently offers the cheapest home loan interest rates starting at 8.40 per cent. But the rates can increase to 11.20 per cent, depending on the credit score, amount, loan tenure, and interest type. This is the case with all home loans. Your income and ability to repay the loan will also be a major factor in determining your loan eligibility. Public sector banks Indian Bank and UCO Bank offer home loans starting from 8.45 per cent to 10.40 per cent.

Private Banks

In the case of private sector banks, Kotak Mahindra Bank offers loans up to Rs. 75 lakh, with interest rates starting at 8.85 per cent. Axis Bank's interest rate starts at 8.75 per cent for a loan up to Rs. 30 lakh. Karnataka Bank maintains a uniform rate across all loan amounts. For a loan of Rs. 30 Lakh to Rs 75 lakh, the interest rate is 8.75 per cent to 10.43 per cent.

Housing Finance Companies

Regarding Housing Finance Companies, GIC Housing Finance offers the lowest rate, starting at 8.45 per cent for all loan amounts. HDFC Ltd. comes in next with an interest rate ranging from 8.50 per cent to 10.35 per cent for loans up to Rs. 30 Lakh, 8.50 per cent to 10.60 per cent for loans above Rs. 30 Lakh and up to Rs. 75 Lakh.

LIC Housing Finance offers an interest rate ranging from 8.60 per cent to 10.35 per cent for loans up to Rs. 30 Lakh. L&T Housing Finance, Godrej Housing Finance, and Bajaj Housing Finance offer interest rates starting at 8.60 per cent for all loan amounts.