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Affordable Home Loan Interest Rates in India | NoBroker
A list of current housing loan interest rates offered by India's top banks and financial institutions.
Buying a house comes with sky-high home loan interest rates. One of the crucial financial decisions you'll make is choosing the right home loan and the rate of interest. But did you know that the interest rate you choose can significantly impact your finances over the long term?
As a smart borrower, you want to make sure you're getting the most competitive rates on your home loan to save money in the long run. With so many options available, it can be overwhelming to choose the right one.
NoBroker’s expert’s insights will guide you to easily compare and select the best home loan interest rates in India that fit your budget.
Comparing Home Loan Interest Rates
| Bank/ NBFC Name | Interest Rate | Processing Fees |
|---|---|---|
| Axis Bank | 8.85% - 14.00% | 1.00% |
| Aditya Birla Capital Home Loan | 9% - 12.50% | 1% |
| Bandhan Bank | 8.65% - 13.65% | 0.25% - 1.00% |
| Bank of Baroda | 8.50% - 10.60% | 0.25%- 0.50% |
| Bank of India | 7.80% - 9.65% | - |
| Bank of Maharashtra | 8.40% - 10.80% | 0.25% or 25,000 (whichever is lower) |
| Canara Bank | 8.85%- 11.25% | ₹1,500 - ₹10,000 |
| Central Bank of India | 8.45% - 9.20% | 0.50% or ₹20,000 + GST (whichever of lower) |
| Citibank | 8.45% | 0.40% |
| Corporation Bank | 8.60% - 11.20% | 0.50% |
| Dena Bank | 8.40% | 0.50% |
| Federal Bank | 10.15% - 10.30% | 1.00% |
| Fullerton Bank | 9.50% | 3.00% |
| HDFC Bank | 8.95% - 9.85% | 0.50% or INR 3,000 (whichever is higher) |
| HSBC | 8.60% | 1% or INR 10,000 |
| ICICI Bank | 9.00% - 10.05% | INR 2,999 |
| IDBI Bank | 8.75% - 11.45% | 0.50% |
| IDFC First Bank | 8.85% | 3.00% |
| Indian Overseas Bank Home Loan | 9.55% | - |
| Indiabulls Housing Finance | 8.75% | 1% |
| Jammu and Kashmir Bank | 8% | 0.25% + GST |
| Karnataka Bank | 9.08% - 10.38% | 0.50% - 2% |
| Karur Vysya Bank | 9.23% - 12.13% | ₹2500 - ₹7500 + GST |
| Kotak Mahindra Bank | 8.85% - 9.40% | 0.50% |
| LIC HFL | 8.70% | 0.30% onwards |
| PNB HFL | 8.50% - 10.85% | - |
| Reliance Home Finance | 9.35% - 13% | 0.50% - 1.50% |
| State Bank of India | 9.15% p.a. - 11.30% p.a. | ₹2000 - ₹10000 + GST |
| Sundaram Home Finance Ltd Home Loan | 6.95% - 8.30% | 0.50% |
| Tata Capital | 8.95% | 2% |
| Union Bank of India | 8.75% | 0.50% or ₹15000 + GST (whichever is lower) |
| YES Bank | 9.15% - 11.25% | 1.5% - ₹10,000 (whichever is higher) |
Types of Home Loan Interest Rates
Home loans offer borrowers the choice between two types of interest rates: fixed and floating. Understanding the differences between these options can help borrowers choose the most suitable loan for their needs and financial goals.
| Point of Differentiation | Fixed Interest Rate | Floating Interest Rate |
|---|---|---|
| Definition | Interest rate that remains constant for the entire loan tenure | Interest rate that fluctuates with market conditions Stability |
| Offers greater stability and predictability as the rate remains constant | Offers flexibility but is subject to market volatility Interest Rate Movement | Unaffected by changes in market interest rates |
| Moves up or down based on market interest rates Risk | Minimal risk as borrowers know their exact repayment amounts throughout the loan tenure | Higher risk as borrowers may have to pay more if interest rates rise |
| Borrower Profile | Ideal for borrowers who prefer to plan their finances and want certainty in their repayment amounts | Ideal for borrowers who are willing to take some risk and want to take advantage of market fluctuations |
| Prepayment Penalty | Usually comes with a prepayment penalty if the loan is paid off early | Generally no prepayment penalty in case the loan is paid off early |
Home Loan EMI Calculation Process
EMI stands for Equated Monthly Installment. It is the fixed amount that a borrower needs to pay to the lender every month until the loan is fully repaid and it includes both the principal amount and the interest.
Let's assume that the borrower wants to take a home loan of INR 50 lakhs for a tenure of 20 years (240 months) at an interest rate of 7%. The EMI calculation can be done as follows:
The first step is to calculate the monthly interest rate by dividing the annual interest rate by 12. In this case, the monthly interest rate would be:
Monthly interest rate = 7% / 12 = 0.583
The EMI can be calculated using the following formula:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
where:
P = Loan amount = INR 50,00,000
R = Monthly interest rate = 0.583%
N = Loan tenure in months = 240
Substituting these values in the formula, we get:
EMI = [50,00,000 x 0.00583 x (1+0.00583)^240]/[(1+0.00583)^240-1]
EMI = INR 38,586 (rounded off to the nearest rupee)
Therefore, the EMI for a home loan of Rs. 50 lakhs at an interest rate of 7% for 20 years would be Rs. 38,586 per month. This means that the borrower would have to pay Rs. 38,586 every month for 240 months to repay the loan in full.
How to Use NoBroker’s Home Loan EMI Calculator?
- Visit NoBroker Home Loan EMI Calculator
- Enter the loan amount, the interest rate charged by the lender, and the loan tenure.
- The EMI calculator will then display the monthly EMI that you would need to pay for the specified loan amount, interest rate, and tenure.
- Additionally, the calculator will also display a pie chart showing the percentage of EMI going towards principal and interest respectively.
Best and Affordable Home Loan Interest Rates
Buying a home is a major investment for most people, and finding the cheapest home loan interest rate can significantly reduce the overall cost of the loan. The table below provides an overview of some of the best and most affordable home loans available in the market, based on factors such as interest rates, loan terms, fees, and eligibility criteria.
| Lender | Interest Rate | Maximum Loan Amount | Maximum Tenure |
|---|---|---|---|
| State Bank of India Home Loan | 9.55% | 5 Crores | 30 Years |
| HDFC Ltd. Home Loan | 8.50% - 9.60% | 10 Crores | 30 Years |
| Kotak Mahindra Bank Home Loan | 8.85% - 9.40% | 10 Crores | 20 Years |
What are the Factors Determining the Home Loan Interest Rates?
Home loan interest rates are determined by several factors that influence the borrowing costs. Understanding these factors can help borrowers negotiate better rates and choose the most suitable loan options for their needs.
Credit ScoreA higher credit score indicates good creditworthiness and reduces the risk of default. Lenders offer lower interest rates to borrowers with a good credit score.
Loan-to-Value RatioA lower LTV reduces the risk of default, and hence, lenders offer lower interest rates to borrowers with a lower LTV.
Income and Employment StabilityA stable income source and employment history improve the chances of timely repayment and hence, lenders offer lower interest rates to such borrowers.
Loan TenureA longer loan tenure increases the risk of default, and hence, lenders offer higher interest rates for longer loan tenures.
Market ConditionsThe home loan interest rates are also influenced by market conditions such as inflation, economic growth, and monetary policies.
Things to Consider Before Taking Home Loan
Before taking out a home loan, there are several factors to consider to ensure that the borrower is fully prepared and capable of managing the loan responsibly. Here are some important things to keep in mind:
Accessing Financial stabilityThe borrower should assess their financial stability and ability to repay the loan in the long run by taking into account the possibility of unexpected expenses such as medical emergencies or job loss.
Evaluating the Credit scoreA good credit score is a critical factor in determining the applicant’s loan eligibility and interest rates. The borrower should check their credit report and score before applying for a loan, and take steps to improve their score if necessary.
Consider Down-PaymentSave for a down payment as it reduces the loan amount and the interest burden and aim to save at least 20% of the property value as a down payment.
Compare LendersThe borrower should research the reputation of potential lenders and read reviews from past clients. They should also check if the lender is licensed and accredited.
Pre-Approved LoansBefore shopping for a home, the borrower should get pre-approved for a loan to know their budget and improve their bargaining power. Pre-approval also speeds up the loan application process.
FAQs
Q. What are the current home loan interest rates in the market?A. The current home loan interest rates vary based on the lender, loan type, loan amount, and other factors. Borrowers can check with different lenders and compare rates to find the most competitive option.
Q. How can I find the best home loans with low interest rates?A. To find the best home loans with low interest rates, borrowers should research and compare lenders, loan types, and other features. It is also recommended to have a good credit score and negotiate with the lender for better rates.
Q. What factors determine the home loan ROI and how can I negotiate better rates?A. The factors that determine the home loan ROI include the lender's cost of funds, inflation, economic conditions, credit risk, and other market factors. Borrowers can negotiate better rates by having a good credit score, providing collateral, and comparing offers from different lenders.
Q. Are fixed or adjustable interest rates better for home loans?A. Fixed interest rates are better for home loans if borrowers prefer predictable monthly payments and long-term stability, while adjustable rates are better if they expect interest rates to decrease in the future and want to take advantage of lower payments.
Q. How can I calculate my monthly payments and overall cost of the loan based on the interest rate?A. Borrowers can use online calculators or consult with their lender to calculate their monthly payments and overall cost of the loan based on the interest rate. This calculation takes into account the loan amount, interest rate, loan term, and other fees such as closing costs and insurance premiums.