Best Home Loan Interest Rates

Check the best home loan interest rates and know which bank is giving the lowest interest rate on home loan, the best home loan interest rates for government employees, home loan interest rates for women, and find out the difference between floating-rate and fixed-rate home loans.

Latest Home Loan Interest Rates 2022

Interest RateStarting @ 6.40%    
Check Best Offers
Processing FeeUp to 0.25%
Loan Tenure5 to 30 years
Lowest EMI Per LakhRs. 626 for 30 years
Prepayment ChargesNil
  • Currently, the best home loan interest rates start from as low as 6.40% p.a.
  • A higher interest rate means a higher EMI amount, and a lower rate means a smaller EMI.
  • If you want to pay a lesser interest cost on your home loan, choose the shorter repayment tenure.
  • Broadly there are two types of home loan interest rates, i.e. Fixed and Floating.
  • Your home loan EMI (equated monthly instalment) changes based on the interest rate applicable on loan.

Best Home Loan Interest Rates of All Banks - 2022

Let us first list the best home loan interest rates in India:

Best Home Loan Interest Rates of Top Public Sector Banks

Bank NameInterest rate (%)Processing fee
Bank of Baroda6.50% - 8.10%Up to 0.50% of loan amount + GST
Bank of India6.50% - 8.85%Nil till 31.03.2022
Bank of Maharashtra6.40% - 9.55%Processing fee waived up to 31.03.2022 under Festive Offer
Canara Bank6.65% - 9.40%0.50% of the loan amount (Min. Rs.1,500 and Max. Rs.10,000)
Central Bank of India6.85% - 7.30%Up to 0.50% of the loan amount (Min. Rs. 2,500 and Max. Rs. 20,000)
IDBI Bank Limited6.75% - 9.90%Up to Rs. 20,000 + taxes
Indian Bank6.50% - 7.50%0.20% to 0.40% (Max. Rs. 50,000)
Indian Overseas Bank7.05% - 7.30%Up to 0.50% (Max. Rs. 25,000)
Punjab National Bank6.75% - 8.80%Full waiver of processing fees from 01.01.2022 to 31.03.2022
State Bank of India6.70% - 6.90%Full waiver 
UCO Bank6.90% - 10.20%0.5% of the loan amount (Min. Rs. 1,500 and Max. Rs. 15,000)
Union Bank of India6.60% - 7.35%0.50% of the loan amount (Max. Rs. 15,000) + GST

Best Home Loan Interest Rates of Top Private Sector Bank

Bank NameInterest rate (%)Processing fee
Axis Bank 6.75%-7.10%Upto 1% of the loan amount 
Bandhan Bank6.4%-11.5%Upto 1% of the loan amount
Dhanlaxmi Bank7.85%-9%1% of loan amount + service tax
Federal Bank7.65%-7.80%0.50% of loan amount
HDFC Ltd6.70%-7.65%Up to 0.50% of the loan amount + applicable taxes
ICICI Bank6.70%-7.55%0.50% - 2.00% of the loan + applicable taxes
IDFC Bank6.50%-8.90%Upto Rs.10,000
Jammu & Kashmir Bank6.95%-7.35%0.25% on the loan amount plus applicable GST
Karur Vysya Bank7.15%-9.35%Rs. 2,500 - Rs. 7,500 + GST
Kotak Mahindra Bank6.55%-7.20%Up to 2% of the loan amount + GST 

Home loan interest rates for all Public and Private Sector banks updated on 05 Apr 2022

Which Bank is Giving the Lowest Interest Rate on Home Loan?

Presently, the Home Loan Interest Rates in India starts from 6.40% p.a onwards offered by Bandhan Bank and Bank of Maharashtra. Other lenders offering the best home loan interest rates of below 6.70% pa. are State Bank of India (SBI), Bank of Baroda (BOB), ICICI Bank, Union Bank of India (UBI), Punjab National Bank (PNB), Central Bank of India, Bank of India (BOI), Canara Bank, UCO Bank, IDBI Bank, Axis Bank, HDFC Ltd, Tata Capital, Bajaj Finserv and LIC Housing.

Name of LenderInterest rate (%)
Punjab & Sind Bank6.50%-7.60%
Kotak Mahindra Bank6.55%-7.20%
LIC Housing6.70%-8.05%
State Bank of India6.70%-7.75%
Bank of Baroda6.50%-8.10%
ICICI Bank6.70%-7.55%
HDFC Ltd6.70%-7.85%
Bajaj Finserv6.70%-14.00%
Union Bank of India6.60%-7.35%
Punjab National Bank6.75%-8.80%
Axis Bank6.75%-7.10%
Tata Capital6.85%

Best Home Loan Interest Rates for Government Employees

Many home loan lenders even factor in the income sources of their home loan applicants when deciding their rates. Generally, lenders charge lower rates from salaried individuals as compared to self-employed individuals.

Among self-employed, chartered accountants and doctors generally hold higher chances of getting their home loans approved at lower rates. Among salaried, government and PSU employees are most preferred by lenders owing to their job security and income certainty. They are followed by the ones employed in reputed and large private sector organisations as these companies are generally looked upon as stable and have increased potential to face economic downturns as compared to other private companies. It lowers the credit risk perception of the lenders resulting in them enticing such employees by offering them lower home loan rates.

Here, we will share the best home loan interest rates offered to government employees:

Name of LenderInterest Rate (%)

Punjab & Sind Bank (PSB Apna Ghar-Sahaj)

(Available to permanent employees of Central/State Governments/PSUs)

6.50%-7.60%

Punjab National Bank (PNB Pride Housing Loan For Government Employees)

(For permanent employees of Central/State Governments/Defence Personnel & Paramilitary forces )

6.75%-8.80%

Check for 50 lakh home loan EMI and apply easily on MyMoneyMantra.

Best Home Loan Interest Rates for Women

To promote financial independence among women, most lenders usually offer the best home loan interest rates to women borrowers. Such rates are usually lower than other individual rates. Usually, the concessional interest rate offered to women borrowers by lenders is 5 bps. 

Additional Info: Also check SBI Home Loan EMI Calculator

Name of LenderFor Women
State Bank of India6.70%-6.90%
Union Bank of India6.60%-7.35%
Punjab National Bank6.75%-8.80%

Additional Info: You can also Check Banglarbhumi West Bengal Land Record

Floating Rate Loans or Fixed Rate Loans - Which are more popular?

Fixed interest rate: Loan's fixed interest rate means the interest rate charged on the home loan amount will stay constant across the tenure. This means your home loan EMI will even stay constant through the repayment period. The benefit of fixed-rate home loans is that the EMI of home loans will remain the same, which would permit you to easily manage your finances. Such loans are prudent if you expect the home loans interest rates to rise in the near future. The flip angle of fixed-rate home loans is that if the market rates fall, you would be still paying a high interest.

Additional Info: Looking for 30 Lakh Home Loan? Check EMI & Apply

Floating interest rate: For those with floating rate home loans means that your rates for a home loan will not remain fixed and will keep changing over the loan tenure. Under floating rate home loan, rates are linked with external benchmarks such as T bill or repo rates that are market-linked. EMI of your home loan might fall or rise subject to changes in the benchmark rates. Plus point of floating interest rates is when the interest rate regime is on a declining trend, the interest rate of home loans is low. Flip angle is if the rates are high, home loans EMI might even shoot, which might negatively affect your budget.

Bank NameInterest rate (%)Processing fee
SBI6.70%-6.90%Full waiver 
Axis Bank Ltd.6.75%-7.10%Upto 1% of the loan amount subject to minimum of Rs.10,000
Bandhan Bank Ltd.6.4%-11.5%Upto 1% of the loan amount subject to minimum of Rs.5000
HDFC Ltd6.70%-7.65%Up to 0.50% of the loan amoun + applicable taxes
ICICI Bank Ltd.6.70%-7.55%0.50% - 2.00% of the loan + applicable Goods & Service Tax
Kotak Mahindra Bank Ltd6.55%-7.20%Up to 2% of the loan amount + GST

Thus, as interest rates of fixed-rate home loans stay the same throughout the entire loan tenure, many of the home loan applicants might opt for it as it eliminates the possibility of witnessing interest rate volatility. But, do note that there are only some lenders providing fixed-rate home loans for the entire repayment tenure. And those who do usually charge higher interest rates for fixed-rate home loans to reduce their interest rate risk.

Most of the lenders may even offer mixed rate home loans where the interest rates remain fixed for a specified period, like 2 or 3 years of home loan repayment tenure, and then it switches to floating rate home loans. Remember that rates charged in the course of the fixed-rate period are usually higher when compared to floating interest rate home loans at the time when the home loan is sanctioned.

Also Read - Documents Required for SBI Home Loan

How to get a home loan at a low-interest rate?

As a home loan is a big-ticket loan, lenders carefully conduct an in-depth evaluation of the applicant's credit history, income, repayment capacity etc. For the applicants looking for a home loan, it is important that they are well aware of the factors that lenders look upon when processing their home loans. Knowing such factors can help them get their home loan approved at lower rates.

Additional Info: Also check Pan Number for Banks

Here is a list of some factors looked upon by home loan lenders to set your interest rate:

Credit score

Lenders consider the applicant's score to be one of the important factors when evaluating his home loan application. Those having a score of 750 and above are generally looked upon as creditworthy and have increased chances of home loan approval at lower rates. It is because those with lower scores are usually considered to be lacking financial discipline, which makes the lenders charge higher rates to make up for their increased risk of credit default.

Thus, if you are someone who have a poor credit score or is new to credit, consider building your credit score by using your credit cards regularly and in a disciplined manner. Once your credit score equals a score of 750 or above, apply for a home loan.

Income

Lenders generally consider applicants having income as safer bets as they have higher disposable income. Those having lower disposable income are considered by the lenders to have higher default chances. Thus, many lenders charge such applicants with higher home loan rates.

Employer’s profile

Also, many of the lenders check the income sources of their home loan applicants when deciding their interest rates. Generally, lenders charge lower home loan rates from the salaried than self-employed people.

Additional Info: How to get Pradhan Mantri Awas Yojana

Doctors and chartered accountants under the self-employed section generally have higher chances of getting their home loans approved at lower rates. Among the salaried class, government employees and PSU are favoured the most owing to their job security and income certainty. Next are those who are employed in reputed private sector organisations that are preferred by the lenders for home loan approval at a lower interest rate. It is because such companies where these individuals are working are considered to be highly stable with a higher potential to face economic downturns as compared to the other private companies. It lowers the lender's credit risk perception resulting in them enticing such staff/employees through lower home loan rates.

Existing consumer relation with lenders

There are many lenders offering preferential rates on home loans to their existing customers. Such relations can be in the form of current, savings or FD accounts or in the form of credit cards or various other loan options. Thus, those seeking a home loan should begin their loan search by directly contacting their banks or NBFCs with whom they share long term existing banking relationships. Interest rates offered to such individuals can be looked upon as a benchmark to compare home loan rates offered by other lenders.

Loan amount

The loan amount that you are looking to borrow can even impact the interest rate of a home loan. Usually, home loans of up to 30 lakh come at lower rates than loans available at higher amounts. For availing of the best home loan interest rates, you should choose to make a higher down payment contribution from your own resources. It lowers the lender's credit risk, which in turn helps at boosting your chances to avail home loan at a lower interest rate.

Additional Info: Also Check Plot Loan

Thus, the prudent ways to get your home loan at lower interest rates are keeping a credit score of 750 and above, making higher down payment contribution from your own funds, widening your home loan search horizon, which includes contacting those banks or NBFCs with whom you already share a banking relationship. Owing to your long term good relationship with a bank, you may get a home loan at a lower interest rate.

Additional Info: Looking for 50 Lakh Home Loan? Check EMI & Apply

Apply for Home Loan Online @ Rs. 626/Lakh* EMI

Apply for instant home loan online at interest rate starting from as low as 6.40% p.a. Pay EMI of just Rs. 626 per Lakh. Loan can be repaid in flexible tenure of up to 30 years. Apply now with minimal documentation. Check eligibility & get instant approval here.

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Best Home Loan Interest Rates FAQs

✅ Which banks are offering the lowest interest rate on a home loan?

Lenders offering the lowest interest rate on a home loan are Bandhan Bank and Bank of Maharashtra. They are offering the best home loan interest rates of 6.65% p.a. Other lenders offering the best home loan interest rate of below 7% p.a. are Bank of Baroda, State Bank of India, Union Bank of India, ICICI Bank, Central Bank of India, Punjab National Bank, Canara Bank, Bank of India, UCO Bank, HDFC Ltd, IDBI Bank, Axis Bank, Bajaj Finserv, Tata Capital and LIC Housing.

✅ What is the current HDFC home loan rate?

Presently HDFC home loan rate ranges between 6.70% - 7.65% p.a.

✅ What is the EMI for Rs 20 lakh loan?

Loan EMI for a home loan of Rs 20 lakh loan amount, 20 years tenure and interest rate of 6.70% p.a. would be Rs 15,148. If the repayment tenure is increased to 30 years with other components, that is, loan amount and interest rate remaining the same, the loan EMI would be Rs 12,906. In case the repayment tenure is decreased to 10 years, with other components, i.e. loan amount and interest rate staying the same, loan EMI would equal Rs 22,940.

✅ How can I lower my home loan interest rate?

One can avail of lower home loan interest rates by widening their home loan search horizon. Besides the interest rate, applicants should also factor in the processing fee and prepayment charges when zeroing on a particular lender. Doing so is crucial as the interest rate and various other linked charges vary across lenders basis their credit risk assessment of the loan applicant. For instance, many home loan lenders might offer lower home loan rates and processing charges to the ones with higher scores equalling 750 and above. Many lenders also decide their rates based on the applicant's job.

Hence, applicants should initially begin their home loan search by approaching those with whom they already share a relation. After this, such applicants should approach online lending marketplaces to compare rates and other features provided by other lenders. One's final application for a home loan must be with the lender offering the lowest home loan rate for the adequate loan amount and optimal loan tenure.

✅ How can I calculate my home loan EMI?

Home loan applicants can use online EMI calculators for knowing their optimum EMI basis for their repayment capacity. They must factor in their contribution towards financial goals when calculating their monthly disposal income. Applying for a home loan after figuring out your EMI repayment capacity allows you to lower the chances of any EMI default in the near future or to compromise on monthly investment to attain financial goals.