Home Loan Interest Rate 2020

Last Updated 31st Mar 2020

Housing Loan Interest Rates

27th March 2020 – RBI cuts Repo Rate by 75 bps to 4.4%

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Lowest Home Loan Rate 7.25% Check Best Offers
Maximum Loan Amount Upto 90% of property value
Processing Fees Up to 0.5% of loan amount or Rs. 10,000 whichever is higher
Maximum Loan Tenure 30 Years
Lowest EMI Per Lakh ₹ 682 for 30 years
Prepayment Charges Nil charges for floating rates loans
Apply for Home Loan @ 7.25%* Get upto ₹ 5,000* Cashback

Compare Home Loan Interest Rates, All Banks in India

Bank Home Loan Rate Benchmark Type Processing Fee
SBI Home Loan 7.90% RLLR 0.20% , Min Rs. 4,000, Max Rs. 30,000
HDFC Home Loan 8.00% PLR 0.50%, Min Rs. 3,000, Max Rs. 10,000
Citibank Home Loan 8.20% TBLR NIL
Bank of Baroda 7.25% RLLR Min Rs. 10,030
ICICI Bank 8.25% RLLR 1.00%
Axis Bank 8.25% RLLR 0.20% , Min Rs. 5,000, Max Rs. 25,000
PNB Housing Finance 8.95% PLR 0.50%, Min Rs. 10,000
LIC Housing Finance 8.10% PLR 0.25%
Indiabulls 9.25% PLR Min Rs. 7,500, Max Rs. 10,000
DBS Bank 8.45% RLLR Max Rs. 10,000
DHFL 9.50% PLR 0.50%, Min Rs. 2,500, Max Rs. 20,000
Kotak Bank 8.60% RLLR Max Rs. 10,000
Bank of India 8.15% RLLR 0.25% , Min Rs. 1,500, Max Rs. 20,000
Yes Bank 9.85% 1 Year MCLR 1.00%, Max Rs. 15,000
Allahabad Bank 8.25% RLLR 0.40% , Max Rs. 50,000
Union Bank of India 8.25% RLLR 0.50% , Max Rs. 15,000
South Indian Bank 8.80% RLLR 1.00% , Max Rs. 10,000
Punjab and Sind Bank 8.05% 1 Year MCLR 0.25%, Min Rs. 1,000, Max Rs. 15,000
Lakshmi Vilas Bank 9.70% RLLR 0.40% , Min Rs. 10,000, Max Rs. 20,000
Karnataka Bank 8.55% RLLR 0.25% , Min Rs. 250
Indian Bank 8.20% RLLR 0.23% , Max Rs. 20,381
GIC Housing Finance 10.25% PLR Min Rs. 2,500
Canara Bank 8.05% RLLR 0.50% , Min Rs. 1,500, Max Rs. 10,000
IDFC First Bank 9.50% RLLR Min Rs. 5,000, Max Rs. 5,000
LT Housing Finance 9.90% PLR 2.00%, Min Rs. 4,999
UCO Bank 8.05% RLLR 0.50% , Min Rs. 1,500, Max Rs. 15,000
Reliance Capital 10.00% PLR 1.00%, Min Rs. 3,000, Max Rs. 6,500
OBC 8.00% RLLR 0.50% , Max Rs. 20,000
Jammu And Kashmir Bank 8.45% 1 Year MCLR 0.25%, Min Rs. 500, Max Rs. 10,000
IDBI Bank 8.25% RLLR 0.50% , Min Rs. 2,500
Federal Bank 8.55% RLLR 0.50% , Min Rs. 3,000, Max Rs. 7,500
Dhan Laxmi Bank 8.85% RLLR 1.00% , Min Rs. 10,000
Corporation Bank 8.35% RLLR 0.50% , Max Rs. 50,000
Bank of Maharashtra 8.50% 1 Year MCLR 0.50%
Tata Capital 9.05% PLR 0.50%
Andhra Bank 8.15% RLLR 0.50% , Max Rs. 10,000
United Bank of India 8.00% RLLR 0.59% , Min Rs. 1,180, Max Rs. 11,800
Standard Chartered Bank 9.40% 3 Month MCLR 1.00%, Min Rs. 5,000, Max Rs. 10,000
Syndicate Bank 8.00% RLLR 0.13% , Min Rs. 500, Max Rs. 5,000
PNB 7.90% RLLR 0.35% , Min Rs. 2,500, Max Rs. 15,000
RBL Bank 10.45% 1 Year MCLR Min Rs. 5,000, Max Rs. 15,000
Karur Vysya Bank 8.20% RLLR Min Rs. 5,000
Indian Overseas Bank 8.20% RLLR 0.53% , Min Rs. 8,900, Max Rs. 13,350
HSBC Bank 8.65% RLLR 1.00% , Max Rs. 10,000
Edelweiss 10.50% PLR 0.25%
DCB Bank 10.24% 1 Year MCLR 2.00%, Min Rs. 5,000
Central Bank of India 8.00% RLLR 0.50% , Max Rs. 20,000
Piramal Housing Finance 9.00% PLR 0.10%

As per the current rates, Bank of Baroda offers the lowest home loan interest rate of 7.25%. Higher the loan amount, higher will be the rate of interest as most of the banks offer discounted rates where home purchase value or loan requirement is less than Rs. 30 lakh.
All customers are not eligible to get cheapest home loan interest rates as the banks may decide on the rates based on the value of the property, your occupation and repayment capacity.

Best Bank for Home Loan

Best Bank for home loan has to be decided based on detailed comparison of offers of leading banks and HFCs on multiple parameters of current interest rates, processing fees, prepayment charges, lending process, documents required and customer service of banks on a regular basis.

  • Bank of Baroda are best banks for home loan as they have the lowest interest rate with an ability to provide loans all over India, given their strong branch network.
  • Axis Bank, ICICI Bank, Kotak Bank are not behind Bank of Baroda in terms of providing low interest home loans which coupled with quick online loan application process make them one of the most preferred choice of banks for taking loan for housing.
  • Citibank is best to take housing loan if a borrower is looking for a home loan with lowest processing fees.
  • You can also use a home loan interest calculator to assess the amount of EMI you can afford. It will help you in deciding the tenure of the loan and the loan amount.

List of top best banks for Housing Loans in India - Mar 2020

  • State Bank of India
  • HDFC
  • ICICI Bank
  • Punjab National Bank
  • Bank of Baroda
  • Axis Bank
  • Kotak Bank
  • Citibank
  • Yes Bank

Home Loan Details

Purpose : Home loan can be used for purchasing a new house, construction of house on a plot, home improvement, extension and renovation of your existing house.

Key Features :

  • Eligibility : Loan available for both salaried and self-employed borrowers within the age group of 18 and 70 years.
  • Security : Mortgage of home you are planning to purchase, renovate or construct.
  • Loan Amount : In the range of ₹ 2 Lakh to ₹ 15 Cr.
  • Loan to Property Value Ratio : Varies from 65% to 90%.
  • Loan Tenure : Can range from 5 to 30 years.
  • Home Loan Interest Rates Benchmark : As per RBI guidelines, most banks have now shifted to RLLR (Repo Linked Lending Rate) which is based on Repo rate. NBFCs use PLR (Prime Lending Rate), as a benchmark to advance loans.
  • Interest Rates : The new Home loan Interest Rates start from 7.25%. Special rates for women borrowers.
  • Lowest EMI : Lowest EMI of ₹ 682 per lakh.
  • Processing Fees : Up to 0.5% of loan amount or Maximum Rs. 10,000, whichever is higher.
  • Prepayment Charges : Nil charges on floating rate home loans
  • Other Charges : Legal charges, technical charges etc.
  • Documents Required : Address Proof, Identity Proof, Income Documents, Property Documents.

Top Home Loan Providers : SBI, ICICI Bank, HDFC Bank, Axis Bank, HDFC, PNB Housing, Bank of Baroda.

Popular Home Loan offers : Banks offer schemes for special category of borrowers including women borrowers, senior citizens, NRIs etc. Banks also offer overdraft facility to save interest on house loan. Some of the popular housing loan schemes are SBI home loan for women, HDFC Reach, Axis Bank 12 EMIs offer, Bank of Baroda pre-approved loans, Indiabulls e-home loans etc.

Home Loan Procedure

Many borrowers believe that process to get a loan for housing begins once you approaching the bank. However, given the complexity of taking a home loan, the process starts with calculating your EMI and eligibility before doing a detailed comparison of offers and schemes of leading banks and NBFCs in India.

Step 1 : Check loan EMI and calculate eligibility

As you decide to take a housing finance, always assess your loan amount eligibility to know the amount you will be eligible for and can apply. Also, calculate the monthly EMI that you can comfortably service, given your net take-home salary and other existing fixed obligations, including rent and EMIs on other existing loans, if any. Your house loan eligibility is calculated based on your age, net income, existing obligations, property type, LTV ratio, and other factors. EMI is dependent on the loan amount, housing loan interest rate and tenure. Once you understand your minimum loan requirement, your eligibility and monthly EMI, you can comfortably service, shortlist the banks which offer you maximum loan amount to meet your requirements.

Step 2 : Check property approval status and legal documents

If you are buying a property from a builder, then check for the banks which have approved the projects you have shortlisted. For resale property, check the approved map plans and ensure that all property registration papers for the complete chain from the first owner to the current owner are in place. Shortlist the banks which lend on your chosen property.

Step 3 : Decide on type of home loan interest rates in India

As you narrow down the list of banks in Step 2 and 3, you need to conduct an interest rate on home loan comparison of the loan offers of various banks. Some of the interest rate offer that needs to be checked are:

  • A Choice between fixed and floating rates - Fixed rates come at a slightly higher rate of interest compared to floating rate loans, and the interest rate remains constant during the tenure of home loan. In floating rate loans, interest rates are reset at periodic intervals in response to changes in MCLR, external benchmark, and PLR rates of banks or NBFCs.The majority of housing loans in India today are floating rate loans as it allows the borrowers to get home loan interest rate in line with the current interest rates. Compare home loan interest rates of all banks before you apply for a loan.
  • Decide if you need a home saver loan - This is a loan with an overdraft facility which allows you to deposit surplus amount in your home loan overdraft account as and when available, allowing you to reduce your overall interest amount. This loan is highly recommended for salaried individuals with high bonuses and self-employed individuals with businesses, which are seasonal and have fluctuating cash flows. The interest rates on overdraft loans are slightly higher than that of a regular housing loan interest rate.
  • You can also evaluate a mortgage guarantee house loan as it covers any default risk and allows the lender to give you a loan at low rate of interest. You will however need to pay a mortgage guarantee fee to the bank.
  • Check and compare the current home loan interest rates of all banks in India on various types of loan products and make an informed decision.
Step 4 : Compare shortlisted banks

You can take the help of loan advisors of online marketplaces like myloancare.in to be able to get details on home loan rates of all banks and make an informed decision. In addition to home finance rates, banks also charge many other fees on housing finance. Along with interest rates, you should check associated costs with your loan, which include prepayment charges, processing fees, insurance premium, and other charges offered by the shortlisted banks. You should calculate all-inclusive costs on home loans to be able to shortlist the banks further and reduce your choice to 2-3 banks.

Step 5 : Select the bank based on other service related parameters

Finally, as you decide to take the loan, also consider other services and related transparency parameters of the chosen banks. Some of these factors are turnaround time offered by the banks, quick loan delivery, doorstep services, transparency in the loan process. You also need to understand the trends and changes in MCLR rates over some time. Last but not least, read reviews of existing customers on banks on their services, interest rates and transparency to take your decision to borrow from a bank.

Home Loan Comparison Table

While all banks and HFCs in India offer multiple home loan schemes, some new schemes like Pradhan Mantri Awas Yojana and DDA are quite popular in India due to their unique features and special discounted rates. Banks like SBI, Axis Bank, Citibank, ICICI Bank, PNB and HDFC have many popular schemes for women loan borrowers, businessmen and existing bank customers. Some of the popular housing loan schemes have been captured in the table below:

Bank Scheme Features
SBIFor Women BorrowersLoan is offered at concessional rate starting @ 8.25%.
Maxgain Home loan with overdraft facility @ 8.30%
Axis Bank Home Loan Top UpLoan to get additional loan amount. Interest rate of top up loan starts @ 8.25%
Shubh Aarambh Home Loan Avail 12 EMI waiver offer at 8.55%
HDFC HDFC Reach Home loan with less documentation starting @ 9.25%
Bank of Baroda Pre-approved Home Loan Loan pre-approved by the bank @ 8.65% before the property is purchased by the applicant with a validity of 4 months
Citibank Home Credit Loan Home loan with overdraft scheme @ 8.60%
Citibank T-Bill Home Loan Innovative scheme in which floating rate home loans are benchmarked to 91 days Govt. T-Bill rate, thus making them completely transparent

Types of Home Loans

The table below summarises the popular types of mortgage loans in India based on their purpose and interest rate.

Home LoanPurpose
New Home LoanTo buy a new flat, apartment or house from a builder or seller.Also includes loan for construction of house on an existing plot.
Home Improvement Loan To renovate your existing home like tiling, flooring, painting etc.
Home Extension LoanTo expand the house by adding new space like floor, room, balcony etc.
Land Purchase LoanTo purchase a plot and build a house. Interest rates are 1.5-2% higher than a home loan, with prespecified time limit for construction.
Home Conversion LoanScheme to allow borrowers to transfer their existing loan from fixed rate to floating rate or vice-versa A conversion fee is levied on the outstanding principal to switch your loan.
NRI Home LoansHome Loan for Non Resident Indians to buy, construct or renovate a home in India.
Home Loan OverdraftBorrowers can add surplus funds in an overdraft account for any period to reduce interest liability. Interest rates are 0.15-0.2% higher than regular housing loan.
Home Loan Top UpTo borrow an additional amount on existing home loan from the same bank or at the time of balance transfer up to a percentage of property value. Interest rates are 0.25-1% higher than regular housing loan.
Home Loan Balance TransferTo transfer your home loan from to another bank offering lower interest rate to save interest and to get top-up loan.
Pre-approved Home LoanLoans that are approved based on credit history, current EMI obligations, etc., well before the property transaction are the pre-approved loan. Interest rates are low and pre-approved offer is valid up to 6 months.

Documents Required for Home Loan

Documents required Salaried Self Employed
Application FormSigned with photographsSigned with photographs
Identity ProofPAN card, Passport, Driving License, Aadhaar Card, Voter id, Govt issued i-cardPAN card, Passport, Driving License, Aadhaar Card, Voter id, Govt issued i-card
Certificate and Proof of Business ExistencePAN, Sales tax/ Excise/ VAT/ Service tax registration, Copy of partnership deed, Trade license, Certificate of practice, Registration certificate issued by RBI, SEBI
Address ProofPassport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill/ Bank statement (not more than 3 months old) Bank statement, Utility bill, Registry copy, Lease or rent agreement, TAN allotment letter
Age ProofPAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate
Property DocumentsPast title chain – Conveyance deed, Sales deed, Allotment letter, Possession letter, Latest property tax receipt, Copy of approved plan for construction/ extensionPast title chain – Conveyance deed, Sales deed, Allotment letter, Possession letter, Latest property tax receipt, Copy of approved plan for construction/ extension

Can I get a home loan during Coronavirus?

Despite the Covid19 related lockdown, all top banks in India are allowing customers to submit a home loan application for getting a loan. Customers can still check their eligibility and compare and choose the most suitable loan. Further, customers can use this time to get their documents ready and submit them online using document upload facility. Such cases will be taken up for processing, sanction and disbursement once normal operations resume. RBI has cut the repo rate of 75 bps and it is expected that banks may soon announce rate cuts on home loan. New home loan borrowers can get loans at extremely low rates if they apply and initiate the loan process now.

Home Loan Interest Rates FAQs

How can I apply for home loan?

You need to submit a home loan application to the shortlisted banks to initiate the process of taking a loan. Home Loan application can be submitted by directly visiting the bank’s branch or by applying at the bank’s website. You can also check and compare the best home loan interest rate of all banks online at MyLoanCare and apply for a loan to multiple banks simultaneously to get deal.

How can I apply home loan in my city?

Nowadays, people living in any part of the country can apply for a loan with all leading banks and NBFCs by walking in to the nearest bank or by applying online at the bank’s website or other loans websites.

What kind of loan is a home loan?

A home loan is a secured loan in which the property to be purchased is given as collateral by the borrower to the bank.

What is the current interest rate for home loans?

The present home loan interest rates ranges between 7.25% to 14.25%.

How is Home Loan interest rate calculated?

The interest rate of home loan is linked to the repo rate. Thus, banks add a margin on the repo rate to arrive at Repo Linked Lending Rate (RLLR). Based on RLLR s small percentage is added to arrive at the home loan rate based on factors like the risk involved, the income of the borrower, and loan amount.

What is the minimum and maximum tenure of house loan?

House Loans are generally long tenure loans and can range from 5 years to 30 years depending on the need of the borrower, his age and his repayment capacity.

What is the EMI for 20 lakhs home loan?

The EMI for 20 lakhs loan at the latest home loan interest rate of 7.25% for the tenure of 30 years is Rs. 682.18.

Which type of home loan is best?

Different home loan types accord for different situations and needs. To pick the best home loan for you, you must assess your monthly budget, expected income and how you want to manage them along with the property you want. For example, if you are sure that interest rates are going to rise in the future, then you can choose for a fixed rate home loan. In another scenario, if you are not sure about the exact amount you are going to use, then opting for an overdraft home loan is the best option.

Which home loan is best fixed or floating?

The fixed home loan is best when you know that there will be a significant increase in the interest rate in the near future. Fixed home loan will secure you from any fluctuations of interest rate in the market. Floating home loan is best when you think that interest rate going to drop in the near future or the increase in the rate will neither be significant nor long term. In the case of floating rate, your interest rate is directly affected by the market rate.

Can I switch from a fixed rate to a floating rate during my home loan tenure?

Yes, most banks allow switching from fixed-rate home loan to floating rate home loan at any time during the tenure upon paying a small fee.

How can I reduce my home loan interest rate?

The interest rate of home loan is decided based on the loan amount, and risk factor associated with a property and borrower. As the loan amount increases, the rate of interest is also expected to increase. However, some banks also offer discounted rates where a woman is the main applicant.

What is the minimum CIBIL score required for home loan?

CIBIL score ranges from 300 to 900. A score of 650 and above is considered a good credit score to get a housing loan. Higher the credit score, the higher the chances to get the loan approved.

Can I get a home loan with a bad credit score?

Yes, you may be eligible for qualifying a home loan even with a low CIBIL score. But, the lenders may charge a higher rate of interest on your loan and may ask you to apply for the loan along with a co-applicant to improve your credit worthiness.

How do I calculate the interest rate on my Home Loan taken some time back? Has it gone up or down?
  • In case your loan was taken as a fixed-rate loan. Most fixed rate loans would offer fixed interest rate for a period ranging from a few months to 15 years. From your sanction letter and loan agreement, check the period for which the interest on your house loan is to remain fixed. If your loan is still in the fixed rate period, your current rate of interest is the same as what it was originally taken at.
  • In case your loan has converted to a floating rate, the loan agreement would specify the formula for the same. The formula may be either RLLR base rate plus a given spread (in case of banks) or PLR minus spread (in case of housing finance companies). For RLLR rate plus spread housing loan, just read the spread mentioned in the loan agreement and add it to the current RLLR of the respective bank. For PLR minus spread loan, check the negative spread mentioned in the loan agreement and subtract it from the PLR of the respective home finance company. Before 1st October 2019, the interest rate of banks were based on MCLR. However, now, banks advance based on the RLLR rate. If your loan is still linked to MCLR, you can shift your benchmark rate to RLLR by contacting your respective bank.
What are the property documents required by Banks and HFCs?

You will need to submit copies of the following property documents

  • Past title chain– Conveyance deed, sales deed, allotment letter, possession letter
  • Receipt of advance payment towards purchase of property in case of resale or booking with builder
  • Latest property tax receipt
  • Copy of approved plan for construction/ extension
Can I apply for housing loan jointly with my spouse?

Yes, you can apply home loan jointly with an earning co-applicant (either be your spouse or your parents). Adding co-applicant can increase your eligibility and you can also avail for a higher amount of loan as your co-applicant’s income also gets added with your income, and that total is taken into consideration for calculating the loan amount you will be eligible for.

Can I get a home loan without ITR?

Many banks have launched schemes to provide home loans without ITRs for borrowers who are self employed and are looking to buy affordable houses. HDFC Reach is once such popular scheme which provides loan with lesser documentation, but charge higher interest rate of 9.25%

Which banks give cheapest home loan?

Lowest home loan interest rate in India is 7.25% which is offered by Bank of Baroda. Even after including the processing fees they charge on the loan, Bank of Baroda are the cheapest home loan providers in India.

Does it affect my co-applicant if I default in home loan?

Yes, if you fail to pay the loan on time then it will also affect the loan will affect his/her CIBIL rating as well.

Can I do balance transfer on house loan?

Yes, if you are getting a higher interest rate and paying higher EMI than other banks, then you can opt for housing loan balance transfer and reduce your monthly burden.

Can I take top up on my existing home loan?

Yes, you can avail top-up on their running house loan only if you have made timely repayment of EMIs accrued on existing home loan. The interest rates on top-up loans are comparatively 0.25 – 1% higher than home finance rates. The loan can be availed with minimal documentation.

What are the tax benefits available on home loans?

Yes, a home loan borrower may avail tax benefit on their principal as well as on the interest rate on home loans:

  • Tax exemption on repayment of principal (under section 80C)– The individual is eligible for a maximum annual tax deduction of Rs. 1,50,000 (Rs. 2 lakh for senior citizens).
  • Tax benefit on the interest rate for a home loan (under section 24):– The individual can avail the tax benefit on the amount of interest paid on their housing loan to the maximum limit of Rs. 2 lakh (Rs. 3 lakh for senior citizens) for a self-occupied property.
Can we repay home loan early?

To repay the home loan early, you can adapt any of the following strategies:

  • You can choose to make a part-payment each year. You can start with a small amount and increase it gradually without reducing the EMI.
  • Another option is that you can choose to make a fixed amount as part payment each year without reducing the EMI.
  • The third strategy is that you invest your savings in a scheme each year and build your funds to the point where it will cover half or more of the outstanding loan amount. At that time, you can withdraw your funds and make part-payment or even opt for foreclosure if you have sufficient funds.
Does home loan prepayment reduce interest?

When you make a prepayment of a home loan, you get the option of either reducing your EMI or the loan tenure. When you choose to lower the tenure of loan and keep the EMI same, then your total interest amount outgo will be less as compared to the interest amount outgo with the same tenure.

What are some parameters to decide home loan eligibility?

Some of the key parameters of home loan eligibility are:

  • Fixed income to obligation ratio, which cannot be more than 65% of monthly income.
  • The income of the applicant, higher the income higher will be the eligibility.
  • Credit score, some banks decide the rate of interest based on credit score too.
  • Type of property, not all property type is eligible for a home loan. You should check the kinds of property which are eligible for a home loan before applying.
Why MyLoanCare???

Nowadays, almost all banks offer attractive schemes on Home Loan at competitive rates with many customer friendly features. You can do rates comparison, check your eligibility, calculate EMI, apply online and get the best Home Loan rates. MyLoanCare helps you throughout the loan process from the day you apply to the time you get disbursement. You can register with us, track your loan status on a regular basis and get an option to earn attractive cashbacks and refer and earn benefits.

Home Loan News - Mar 2020
*Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More