Home Loan Interest Rates

Home Loan Interest Rate Comparison of All Banks

Existing home loan linked to base rate to benefit from MCLR from 1st April 2018

Home loan interest rate starts @ 8.30%. The interest rate on housing loan of various banks in India are

BankHome Loan RateProcessing Fee
SBI Home Loan 8.30%Nil
HDFC Home Loan 8.35%0.50%
Min Rs. 3,000 - Max Rs. 10,000
ICICI Bank Home Loan 8.35%0.50%
Min Rs. 5,000 - Max Rs. 5,000
Axis Bank 8.35%0.50%
Min Rs. 2,500 - Max Rs. 25,000
PNB Housing Finance 8.60%1.00%
Min Rs. 10,000 - Max Rs. 10,000
Bank of Baroda 8.30%0.50%
Min Rs. 7,500 - Max Rs. 20,000
LIC Housing Finance 8.50%0.50%
Indiabulls 8.35%Min Rs. 1,000 - Max Rs. 5,000
Citibank 8.35%Nil
DBS Bank 8.60%Max Rs. 10,000
DHFL 8.35%0.50%
Min Rs. 2,500 - Max Rs. 20,000
Kotak Bank 8.40%Max Rs. 10,000
Jammu And Kashmir Bank 8.65%0.25%
Min Rs. 500 - Max Rs. 10,000
IDBI Bank 8.35%0.50%
Min Rs. 2,500
Federal Bank 8.95%0.50%
Min Rs. 3,000 - Max Rs. 7,500
Dhan Laxmi Bank 9.80%1.00%
Min Rs. 10,000
IDFC Bank 8.50%Min Rs. 2,500 - Max Rs. 2,500
Canara Bank 8.65%0.50%
Min Rs. 1,500 - Max Rs. 10,000
United Bank of India 8.55%0.59%
Min Rs. 1,180 - Max Rs. 11,800
Syndicate Bank 8.75%0.13%
Min Rs. 500 - Max Rs. 5,000
RBL Bank 10.20%Min Rs. 5,000 - Max Rs. 15,000
Karur Vysya Bank 9.10%Min Rs. 5,000
Indian Overseas Bank 8.40%0.53%
Min Rs. 8,900 - Max Rs. 13,350
HSBC Bank 8.65%1.00%
Max Rs. 10,000
Edelweiss 10.50%0.25%
DCB Bank 10.48%2.00%
Min Rs. 5,000
Yes Bank 9.35%0.50%
Max Rs. 10,000
Corporation Bank 8.85%0.50%
Min Rs. 1,000 - Max Rs. 50,000
LT Housing Finance 9.90%2.00%
Min Rs. 4,999
Bank of Maharashtra 8.70%0.50%
Union Bank of India 8.30%0.50%
Max Rs. 15,000
Andhra Bank 8.45%0.50%
Max Rs. 10,000
South Indian Bank 8.90%1.00%
Max Rs. 10,000
Standard Chartered Bank 8.55%1.00%
Min Rs. 5,000 - Max Rs. 10,000
Punjab and Sind Bank 8.75%0.25%
Min Rs. 1,000 - Max Rs. 15,000
PNB 8.35%0.50%
Min Rs. 20,000 - Max Rs. 50,000
Lakshmi Vilas Bank 9.55%1.20%
Karnataka Bank 9.50%0.25%
Min Rs. 250
Indian Bank 8.25%0.23%
Max Rs. 20,381
GIC Housing Finance 10.25%Min Rs. 2,500
Dena Bank 8.25%0.50%
IIFL 8.50%1.00%
Max Rs. 10,000
Central Bank of India 8.50%0.50%
Max Rs. 20,000
Vijaya Bank 8.65%0.50%
Min Rs. 1,000 - Max Rs. 20,000
Bank of India 8.65%0.25%
Min Rs. 1,000 - Max Rs. 20,000
UCO Bank 8.55%0.50%
Min Rs. 1,500 - Max Rs. 15,000
Allahabad Bank 8.50%0.40%
Max Rs. 50,000
Reliance Capital 10.00%1.00%
Min Rs. 3,000 - Max Rs. 6,500
OBC 8.40%0.50%
Max Rs. 20,000

As per the current rates, SBI, Bank of Baroda, Union Bank of India offer the lowest home loan interest rate of 8.30%. These rates can vary depending upon the value of the property and your repayment capacity. Higher the loan amount, higher will be the rate of interest.
After the latest home loan rate cuts announced by SBI, Bank of Baroda, Union Bank of India in 2018, new home loan interest rates start from 8.30% for home buyers as well as for those who want to transfer their loan from other banks.

Existing home loan linked to base rate to benefit from MCLR from 1st April 2018 - RBI in its monetary policy on 7th Feb 2018 has mandated that banks’ base rates be linked to MCLR rates. This will benefit home loan borrowers whose loans are linked to base rate. Any increase or decrease in MCLR rates will now automatically be applicable to pre 2016 loans that are benchmarked to base rate.

Home Loan Details

Interest RateStarting @ 8.30%
Check Best Offers
Processing FeeUpto Rs. 10,000 or 1% of loan amount, whichever is higher
Loan TenureUpto 30 years
Lowest EMI Per LakhRs. 755 for 30 years
Prepayment ChargesNil charges for floating rates loans

How to get best home loan rates

It has never been easier to get the best home loan, as today you can do online home loan comparison based on interest rates, processing fees, other loan terms and conditions of all banks before choosing the right loan offer. It is advisable to follow these steps to get a hassle free, lowest cost and most transparent housing loan.

Step 1 : Check loan EMI and calculate eligibility

As you decide to take a home loan, always estimate your loan amount eligibility to know the loan amount you will be eligible for and can apply for. 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, 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 best loan amount to meet your requirements.

Step 2 : Check property approval status and legal documents

If you are buying a property from 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 current owner are in place. Shortlist the banks which lend on your chosen property.

Step 3 : Decide on type of home loan interest rate offers

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 offers that needs to be checked are:

  • Choice between fixed and floating rates - Fixed rates come at a slightly higher rate of interest compared to floating rate loans and interest rate remains constant during the tenure of home loan. In floating rate loan, interest rates are reset at periodic intervals in response to changes in MCLR and PLR rates of banks or NBFCs. 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.
  • Decide if your need a home saver loan - a loan with 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 business which is seasonal and has fluctuating cash flows. The interest rates on overdraft loan is 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 loan at low rate of interest. You will however need to pay a mortgage guarantee fee to the bank.
    Check and compare the interest rates of the banks on various types of loan products and take an informed decision.
Step 4 : Compare shortlisted banks

In addition to interest rates, banks also charge many other fees on home loans. Along with interest rates, you should check other associated costs with a home loan which include prepayment charges, processing fee, insurance premium and other charges offered by the shortlisted banks. You should calculate all inclusive costs on home loan to be able to further shortlist the banks and reduce your choice to 2-3 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 take an informed decision.

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

Finally as you decide to take the loan, also consider other service and transparency related 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 a period of time. Last but not the least, read reviews of existing customers on banks on their services, interest rates and transparency to take your decision to borrow from a bank.

Documents needed for Home Loan Application

Documents required Salaried Self Employed
Application FormSigned with photographsSigned with photographs
Identity ProofPAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-cardPAN card, Passport, Driving License, Aadhar 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
Income ProofForm 16, Latest 6 months salary slip, Last 6 months bank statementLast 2 years ITR, Last 6 months bank statement
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

Compare Home Loan Charges

  • Home Loan processing fees - Most banks charge processing fees of up to Rs. 10,000 or up to 1% on house loans, whichever is higher. To get lowest fee, comparison of home loan rates, offers and cashback, apply online through MyLoanCare.
  • Home Loan prepayment and foreclosure - Nobody wants to keep paying interest on a loan when you have surplus money available to repay it. When you want to repay your loan partially before time, it is called part prepayment. In case you decide to pay the entire loan amount before time, it is called foreclosure. Banks typically levy prepayment or foreclosure charges in such situations and these can range from nil to upto 5%. So, check carefully if the low rate of interest you are getting comes with high prepayment or foreclosure charges. Note that some home loans cannot be repaid before time.
  • Special interest rates for specified category of borrowers - Banks launch attractive schemes with low interest rates on housing loans on a regular basis, especially for women borrowers. Hence, always check for home loan offers from multiple banks to get the best rates.
  • Other Charges - Bank charges legal and technical fee from the borrower which are explained at the time of loan processing.

Frequently Asked Questions

Which bank is best for home loan?

SBI, Bank of Baroda, Union Bank of India are best banks for taking a home loan based on their current home loan rates as they offer low interest rate of 8.30%.
Best Banks for taking home loans based on processing fees are:
Syndicate Bank charges the lowest processing fees of 0.13% as a % of loan amount. IDFC Bank caps the processing fees to a maximum of Rs. 2,500 irrespective of the loan amount.

How can I apply for home loan?

You can apply for loan in several ways. You can directly visit the bank branch and meet the sales person, contact a loan agent or apply online at any bank or NBFC’s website. You can also check and compare best interest rates of all banks online at MyLoanCare and apply for loan.

What is the minimum and maximum tenure of house loan?

These are generally taken for a longer period of time. The loan tenure for hosuing loan ranges from 5 years to 30 years.

What is the CIBIL score for home loan?

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

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 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 same as what it was originally taken at
  • In case your loan has converted to floating rate, the loan agreement would specify the formula for the same. The formula may be either MCLR base rate plus a given spread (in case of banks) or PLR minus spread (in case of housing finance companies). For MCLR rate plus spread housing loan, just read the spread mentioned in the loan agreement and add it to the current MCLR rate 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. You can find the current MCLR rate or PLR of your bank or housing finance company at Current MCLR Base Rate and PLR
How does interest rate impact House Loan eligibility?

Maximum loan eligibility depends upon the EMI that you can pay based on your monthly income. The EMI comprises of two components – interest on loan amount and principal repayment. Higher the rate of interest, higher the component of EMI that goes towards meeting interest and lower the principal repayment component of EMI. So, rate of interest is a critical input for calculating Home Loan eligibility. You can calculate your loan eligibility by using Home Loan Eligibility Calculator

What are the property documents required by Banks/HFC?

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 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 to your income and that total is taken into consideration for calculating the loan amount you will be eligible for.

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 your co-applicant as default in loan will affect his/her CIBIL rating as well.

Can I do balance transfer on house loan?

Yes, if you are getting higher interest rate and paying higher EMI than other banks, then you can opt for home 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 rate charges on a top up loans are comparatively 0.25 – 1% higher than a home loan and it requires very minimal documentation for loan processing.

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 loan along with a co-applicant to improve your credit worthiness.

What are the tax benefits available on home loans?

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

  • Tax exemption on repayment of home loan 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 home loan (under section 24):– The individual can avail the tax benefit on the amount of interest paid on their home loan to the maximum limit of Rs. 2 lakh (Rs. 3 lakh for senior citizens) for a self-occupied property.
Why MyLoanCare???

Nowadays, banks give various offers on Home Loan to give the best rates to individuals. To get Home Loan with lowest interest rate and lowest EMI, compare new rates and offers of all banks at MyLoanCare. You can do rates comparison, check your eligibility, apply online and get the cheapest rate on Home Loan. MyLoanCare helps you throughout the loan process from the day you apply to the time you get complete disbursement. You can even track your loan status after getting registered with us. MyLoanCare make it easy for you to get hassle free Home Loan with ultimate cashback and refer and earn benefits. So, apply for Home Loan today and enjoy the benefits.

Home Loan News - Feb 2018
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