A home loan is a long-term financial commitment, and it is essential to find the lowest interest rates possible to save on interest payments over the loan tenure. Several banks and financial institutions in India offer home loans at competitive interest rates. In this article, we will discuss India’s lowest home loan interest rates and the factors that affect them.
Factors affecting home loan interest rates in India
1. Repo rate
The repo rate is the interest rate at which the Reserve Bank of India (RBI) lends money to banks. The RBI changes the repo rate from time to time to regulate the money supply in the economy. When the repo rate increases, banks also increase their lending rates, including home loan interest rates.
2. Inflation
Inflation refers to the rate at which the general price level of goods and services increases. High inflation leads to higher interest rates, as lenders demand a higher return to compensate for the decrease in the value of money over time.
3. Credit score
A credit score is a three-digit number that reflects an individual’s creditworthiness. Banks and financial institutions consider an individual’s credit score while approving a loan and determining the interest rate. A higher credit score can lead to lower interest rates, while a lower credit score can lead to higher interest rates.
4. Loan amount
The loan amount is the borrower’s money from the bank or financial institution. The interest rate for a higher loan amount may be lower than that for a lower loan amount, as banks consider high loan amounts less risky.
5. Loan tenure
The loan tenure is the duration for which the borrower takes the loan. The interest rate for a longer loan tenure may be higher than that for a shorter loan tenure, as banks consider longer tenures riskier.
Lowest home loan interest rates in India
The following are some of the lowest home loan interest rates in India offered by banks and financial institutions:
1. State Bank of India (SBI)
SBI is one of the largest banks in India and offers home loans at competitive interest rates. The interest rate for SBI home loans starts at 6.70% per annum for loans up to Rs. 30 lakhs and 6.75% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 6.80% per annum.
2. HDFC Bank
HDFC Bank is one of the leading banks in India and offers home loans at competitive interest rates. The interest rate for HDFC Bank home loans starts at 6.75% per annum for loans up to Rs. 30 lakhs and 6.90% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 7.00% annually.
3. ICICI Bank
ICICI Bank, India’s leading private-sector bank, offers home loans at competitive interest rates. The interest rate for ICICI Bank home loans starts at 6.75% per annum for loans up to Rs. 30 lakhs and 6.90% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 7.00% annually.
4. Axis Bank
Axis Bank is one of India’s leading private-sector banks and offers home loans at competitive interest rates. The interest rate for Axis Bank home loans starts at 6.90% per annum for loans up to Rs. 30 lakhs and 7.00% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 7.15% per annum.
5. LIC Housing Finance
LIC Housing Finance is a subsidiary of the Life Insurance Corporation of India and offers home loans at competitive interest rates. The interest rate for LIC Housing Finance home loans starts at 6.90% per annum for loans up to Rs. Fifty lakhs and 7.00% per annum for loans above Rs. Fifty lakhs and up to Rs. 3 crores. The interest rate for loans above Rs. 3 crores is 7.20% per annum.
6. Bank of Baroda
Bank of Baroda is India’s leading public sector bank and offers home loans at competitive interest rates. The interest rate for Bank of Baroda home loans starts at 6.75% per annum for loans up to Rs. 30 lakhs and 6.85% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 7.00% annually.
7. Punjab National Bank (PNB)
PNB is India’s leading public sector bank and offers home loans at competitive interest rates. The interest rate for PNB home loans starts at 6.80% per annum for loans up to Rs. 30 lakhs and 6.85% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 7.00% annually.
8. Union Bank of India
Union Bank of India is a leading public sector bank in India and offers home loans at competitive interest rates. The interest rate for Union Bank of India home loans starts at 6.80% per annum for loans up to Rs. 30 lakhs and 6.90% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 7.05% annually.
9. Canara Bank
Canara Bank, India’s leading public sector bank, offers home loans at competitive interest rates. The interest rate for Canara Bank home loans starts at 6.80% per annum for loans up to Rs. 30 lakhs and 6.90% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 7.00% annually.
10. IDBI Bank
IDBI Bank is a public sector bank in India that offers home loans at competitive interest rates. The interest rate for IDBI Bank home loans starts at 6.75% per annum for loans up to Rs. 30 lakhs and 6.90% for loans above Rs. 30 lakhs and up to Rs. 75 lakhs. The interest rate for loans above Rs. 75 lakhs is 7.00% annually.
Factors to consider while selecting a home loan with low-interest rates
- Compare interest rates: It is essential to compare the interest rates offered by different banks and financial institutions to choose the one that offers the lowest interest rate.
- Loan amount: Consider the loan amount required to purchase the property. Some banks may offer lower interest rates for higher loan amounts.
- Loan tenure: Consider the loan tenure required to repay the loan. Banks may offer lower interest rates for shorter loan tenures.
- Processing fees: Consider the processing fees charged by the banks. Some banks may charge.
| Bank Name | Lowest Interest Rate (per annum) |
|---|---|
| SBI | 6.70% |
| HDFC Ltd | 6.75% |
| Axis Bank | 6.75% |
| ICICI Bank | 6.75% |
| LIC Housing Finance | 6.90% (up to Rs. 50 lakhs) 7.00% (above Rs. 50 lakhs and up to Rs. 3 crores) 7.20% (above Rs. 3 crores) |
| Bank of Baroda | 6.75% (up to Rs. 30 lakhs), 6.85% (above Rs. 30 lakhs and up to Rs. 75 lakhs), 7.00% (above Rs. 75 lakhs) |
| Punjab National Bank | 6.80% (up to Rs. 30 lakhs), 6.85% (above Rs. 30 lakhs and up to Rs. 75 lakhs, 7.00% (above Rs. 75 lakhs) |
| Union Bank of India | 6.80% (up to Rs. 30 lakhs), 6.90% (above Rs. 30 lakhs and up to Rs. 75 lakhs), 7.05% (above Rs. 75 lakhs) |
| Canara Bank | 6.80% (up to Rs. 30 lakhs), 6.90% (above Rs. 30 lakhs and up to Rs. 75 lakhs), 7.00% (above Rs. 75 lakhs) |
| IDBI Bank | 6.75% (up to Rs. 30 lakhs), 6.90% (above Rs. 30 lakhs and up to Rs. 75 lakhs), 7.00% (above Rs. 75 lakhs) |
FAQs
Q: What is a home loan?
A: A home loan is a secured loan available to purchase a house or property.
Q: What are the factors that affect home loan interest rates?
A: Home loan interest rates in India are determined based on various factors such as credit score, income, employment history, loan amount, and repayment tenure.
Q: What is the current home loan interest rate in India?
A: The current home loan interest rates in India range from 6.70% to 8.10%, depending on the lender, borrower’s credit score, loan amount, and repayment tenure.
Q: Which banks offer the lowest interest rates on home loans in India?
A: Some of the banks that offer the lowest interest rates on home loans in India include the State Bank of India (SBI), Punjab National Bank (PNB), HDFC Bank, ICICI Bank, and Kotak Mahindra Bank.
Q: What minimum and maximum loan amount can be availed through a home loan in India?
A: The minimum loan amount that can be availed through a home loan in India is typically Rs. 1 lakh, while the maximum loan amount can go up to Rs. 10 crores or more depending on the lender, borrower’s income, and repayment capacity.
Q: What is the repayment tenure for home loans in India?
A: The repayment tenure for home loans in India typically ranges from 5 to 30 years, depending on the lender and loan amount.
Q: Can the interest rate on home loans change during the repayment tenure?
A: Yes, the interest rate on home loans in India can be fixed or floating. If it is a fixed-rate loan, the interest rate remains unchanged throughout the loan tenure. If it is a floating-rate loan, the interest rate can change based on the market conditions.
Q: Can I prepay my home loan?
A: Yes, most lenders in India allow prepayment of home loans without any penalty or charges. However, it is important to check the terms and conditions of the loan agreement before making a prepayment.
Q: How can I apply for a home loan in India?
A: Home loans can be applied online or offline through various channels such as the lender’s website, mobile app, bank branches, and loan agents. Applicants must submit their personal and financial details along with the required documents for loan processing and approval.