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Home Loan Interest Rates

Home loan interest rates in India start from 8.20% p.a. After the borrower is found eligible for the home loan, they get their home loan interest rates from lending institutions. Being a secured loan, the approval process that involves getting the sanction letter for your Home Loan is not a tough task. You can also choose between fixed and floating, the different types of home loan interest rates for your house loan.

Let’s find the best home loan for you.

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You are just a few clicks away from the best Home Loan offer in your city. Currently home loan interest rate starts at 8.20% p.a for all loan amounts. Share your name, mobile number & email to check your eligibility and get a list of most affordable home loan schemes.

Let’s find the best home loan for you.

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Updated:

Current Home Loan Interest Rates 2022

Interest RateStarting @ 8.20%       
Check Best Offers
Processing FeeUp to 0.25%
Loan TenureUp to 30 Years
Lowest EMI Per LakhRs. 748
Prepayment ChargesNil
  • Home loan interest rates can be floating or fixed in nature.
  • Interest rates remain unchanged throughout the tenure for fixed interest rate home loans.
  • Interest rates fluctuate depending on the RBI or bank’s policies, and other external factors for floating interest rate based home loans.
  • Interest rates on home loans can be linked to Repo Rate or MCLR (Marginal Cost of Funds Based Lending Rate). 
  • The Best interest rates for home loans have become highly affordable in the last couple of years.

Compare and Apply for Lowest Home Loan Interest Rates in India - 2022

Bank NameInterest RateEMI/Lakh (in Rs. for 30 year tenure)Processing Fees 
Central Bank of India8.20% - 10.20%Rs. 748 - Rs. 892Up to 0.50% of loan amount (Maximum Rs. 20,000)
Jammu & Kashmir Bank Ltd.8.35% p.a. onwardsRs. 7580.25% of loan amount + GST (Minimum Rs. 5,000 & Maximum Rs. 25,000)
CitibankStarting @7.40%Rs. 692Up to Rs. 5000
IDBI Bank Limited8.50% - 11.65%Rs. 769 - Rs. 1002Up to Rs. 20,000 + taxes 
Bajaj FinservStarting from 8.30%Rs. 755Up to 1% of loan amount (Minimum Rs. 700)
Bandhan Bank8.30% - 13.40%Rs. 755 - Rs. 1,1380.50% of loan amount
Bank of Maharashtra8.00% - 10.20%Rs. 734 - Rs. 8920.25% of loan amount (Maximum Rs. 25,000)
Bank of India8.30% - 10.25%Rs. 755 - Rs. 896Maximum Rs. 50,000
Indian Bank7.85% - 9.35%Rs. 723 - Rs. 830Up to 0.30% of loan amount (Maximum Rs. 20,470)
PNB Home Loan8.20% - 9.35%Rs. 748 - Rs. 830Up to 0.35% of loan amount (Maximum Rs. 15,000)
Union Bank of India8.25% - 10.10%Rs. 751 - Rs. 885Up to 0.50% of loan amount (Maximum Rs. 15,000) + GST
UCO Bank8.40%– 12.10%Rs. 762 - Rs. 10360.5% of loan amount (Minimum Rs. 1,500 & Maximum Rs. 15,000)
Bank of Baroda8.45% -10.05%Rs. 765 - Rs. 881Up to 0.50% of loan amount (Minimum Rs. 8,500 & Maximum Rs. 25,000)
Tamilnad Mercantile Bank Ltd.Starting @8.30%Rs. 7550.50% of loan amount + taxes
Karnataka Bank Ltd.8.25% – 9.49%Rs. 751 - Rs. 840As mentioned by the bank
Kotak Mahindra Bank Ltd8.30%  - 9.10%Rs. 755 - Rs. 812Up to 0.50% of loan amount + GST & other statutory levies
Karur Vysya Bank Ltd.8.60% – 9.50%Rs. 776 - Rs. 841Minimum Rs. 2,500 & Maximum Rs. 7,500 + GST
SBI8.40% - 9.05%Rs. 762 - Rs. 808Up to 0.50% of loan amount + GST 
LIC Housing Finance8.30% - 9.25%Rs. 737 - Rs. 8230.50% of loan amount + GST
Canara Bank8.85%   10.80%Rs. 794 - Rs. 9370.50% of loan amount (Minimum Rs. 1,500 & Maximum Rs. 10,000)
Axis Bank8.60% - 9.05%Rs. 776 - Rs. 808Up to 1% of loan amount (Minimum Rs. 10,000)
ICICI Bank8.40% - 9.50%Rs. 762 - Rs. 841Up to 0.50% of loan amount or Rs. 2,000, whichever is higher + GST
HDFC Bank8.40% - 8.50%Rs. 762 - Rs. 841Up to 0.50% of loan amount or Rs. 4,500, whichever is higher + applicable taxes.
South Indian Bank Ltd.9.25% - 12%Rs. 823 - Rs. 1.0290.50% of loan amount (Minimum Rs. 5,000 & Maximum Rs. 10,000)
Dhanlaxmi Bank Ltd.9.00% - 10.10%Rs. 805 - Rs. 8851% of  loan  amount (Minimum Rs. 10,000) + service tax
Indian Overseas Bank8.00% - 8.90%Rs. 734- Rs. 797Up to 0.50% (Maximum Rs. 25,000)
YES Bank Ltd.8.95% - 11.80%Rs. 801 - Rs. 1,0131% of loan amount or Rs. 10,000, whichever is higher + GST
Federal Bank Ltd.9.55% - 9.70%Rs. 845 - Rs. 8550.50% of loan amount (Min. Rs. 3,000 - Rs. 7,500)
IDFC First8.45%Rs. 765Up to Rs. 10,000
Piramal Housing FinanceStarting from 10.50%Rs. 915 onwardsUp to 3% of loan amount + applicable taxes 

Additional Info: Also check Home Loan for Salaried Employees

How to get Lowest Home Loan Interest Rates for my dream home in India?

If you are eyeing the dream house you always wanted, this question is surely the first thing that comes to your mind. Let's check out these aspects that define the course of your home loan interest rate -

Is the Property in a Good Location? 

Property in an approved society has more chance of getting a loan amount up to 75-90% of the property value.

Do you have a Good Credit Score?

You must have a Credit Score of 750 or above to get approval for a home loan. The higher the credit score, the higher will be your chances of getting a low-interest rate.

Apply at the Bank where you have an Account

A good understanding with the bank will always help you in getting a high loan amount and that too at a competitive rate of interest on your home loan without any hassle.

High Income and Clubbing of Earning Applicants in Loan Application

A person earning a high income has good chances of getting a lower rate and a higher amount. In case you have more than one earning member, you can also apply for a home loan keeping that person as a co-applicant in your loan process. This will increase the overall income of your house and so you will get a high loan amount.

Keep all Property-related Documents

It is very important to maintain and keep all the property documents with you. As it helps the lender identify your property and its worth properly and thus trust your profile.

Make Sure you have Income Proof

Many people do not know that your loan application may be rejected. If you do not have income proof or a salary slip. Only a few NBFCs accept such cases but then they give high rates.

Apply at a Young Age

If your age at the time of applying is in your early 30s or late 20s. You are more eligible for a higher loan amount as you have fewer financial liabilities. Also, when you apply at a young age your loan tenure can go as far as 25-30 yrs resulting in smaller EMIs

Transfer your Home Loan to a Lower EMI

You can balance transfer your existing home loan to a lender offering a lower rate on your home loan to save your money.

Additional Info: Also check How to Apply for Pradhan Mantri Awas Yojana

How Can You Save Big by Choosing a Lower Tenure for Your Home Loan?

Many borrowers think choosing a lower tenure for their home loan will allow them to spend less monthly and that's it. But, what they fail to realize is that by going for a longer tenure they are also increasing total interest outgo which when bended with the principal amount amounts to a considerably big sum than in a situation where your home loan tenure is lower.

Lets see this difference with a small example:

Case 1

Assuming you avail a loan of Rs 30 Lacs at an interest of 8.20% for a tenure of 20 yrs.

YearEMI (p.a)Interest (p.a)Principal (p.a)Closing Balance
13,05,6152,43,70861,90729,38,093
23,05,6152,38,43667,17928,70,914
33,05,6152,32,71672,89927,98,015
43,05,6152,26,50879,10727,18,909
53,05,6152,19,77285,84326,33,066
63,05,6152,12,46293,15325,39,913
73,05,6152,04,5301,01,08524,38,828
83,05,6151,95,9221,09,69323,29,136
93,05,6151,86,5811,19,03422,10,102
103,05,6151,76,4451,29,17020,80,932
113,05,6151,65,4461,40,16919,40,763
123,05,6151,53,5101,52,10517,88,659
133,05,6151,40,5581,65,05716,23,602
143,05,6151,26,5031,79,11214,44,490
153,05,6151,11,2511,94,36412,50,126
163,05,61594,7002,10,91510,39,211
173,05,61576,7402,28,8758,10,337
183,05,61557,2512,48,3645,61,973
193,05,61536,1022,69,5132,92,460
203,05,61513,15230,00,0000

Case 2

You avail a home loan of Rs 30 Lacs at 8.20% for 15 yrs.

YearEMI (p.a)Interest (p.a)Principal (p.a)Closing Balance
13,48,2042,42,0701,06,13428,93,866
23,48,2042,33,0321,15,17227,78,694
33,48,2042,23,2251,24,97926,53,715
43,48,2042,12,5831,35,62125,18,094
53,48,2042,01,0341,47,17023,70,923
63,48,2041,88,5021,59,70222,11,221
73,48,2041,74,9031,73,30120,37,920
83,48,2041,60,1461,88,05818,49,862
93,48,2041,44,1322,04,07216,45,790
103,48,2041,26,7552,21,44914,24,341
113,48,2041,07,8982,40,30611,84,034
123,48,20487,4352,60,7699,23,265
133,48,20465,2302,82,9746,40,291
143,48,20441,1333,07,0713,33,220
153,48,20414,98530,00,0000
TenureEMIInterest Outgo
20 yrsRs. 25,468Rs. 31,12,295
15 yrsRs. 29,017Rs. 22,23,062

Comparison between both tenures clearly suggest that you are going to save around Rs 8,89,233 from your pocket.

Additional Info: Also Apply Section 80CCD

lowest interest rate home loan

Factors that Affect Your Home Loan Apart from Interest Rate

The six main factors that affect home loans apart from interest rates are explained below. These are just a few factors from the whole big list. It is important to consider each of these while applying for a home loan.

  • Age isn’t Just a Number: The younger the applicant is, the more money will be sanctioned. Also, this increases the probability of getting the loan approved quickly. Though the maximum limit to apply for a loan for a salaried individual is 60 years, the tenure of the loan will be too less. Usually, for home loans, people look for a decent amount with at least 3- 5 years tenure.
  • Earn a Sizeable Income: How much you earn will determine how much you can get. Bank will scrutinize every aspect of your income and expenditure to check what percentage of your income is available to repay the loan amount. For this, they need your salary slips, bank statements, employer authentication, and more.
  • City: The place you live in will determine what should be your loan amount and EMI value. Living in expensive cities will help you gain larger loan amounts and vice versa. Cities like Mumbai and Delhi are considered Tier- 1 (expensive cities) and Agra and Meerut are Tier-2 (not so expensive cities).
  • Credit Score: Apart from the applicant’s company performance, individual credit rating holds a lot of value. Having a good credit rating increases the probability of getting a loan with more flexible options on tenure, amount, EMI, and interest rates. In case of any default payment records, huge outstanding loans, or fraudulent track records, the bank has every right to cancel the loan or charge a higher interest rate.
  • Existing Debts: Be smart to clear off your outstanding debts and expenditures before applying for a fresh loan. These outstanding loans will reduce the probability of getting the new loan sanctioned with hassles. Yes, it is not always possible to clear off all debts, but making regular payments without any defaults can make a difference in your life.
  • Try Clubbing Incomes: Just like how too many sticks put together will be stronger than a single one, club income of different members in the family. It is possible to club your family member’s salary while applying for a home loan. However, clubbing the salary of an unmarried daughter is not allowed. Make use of the resource pool in the option to get better facilities and offers on the home loan application. Before approaching banks, sit back and decide how to club incomes and EMI payments within the family. It is also critical to ensure each person’s financial credit score is high enough to avail a loan.
  • External benchmark lending rates: Since Oct 2019, floating rate home loans are linked to external benchmarks such as repo rate, yield on three-month or six-month treasury bills, or any other benchmark rate released by FBIL i.e. Financial Benchmarks India Pvt. Ltd. Based on this benchmark rate and customers’ risk premium the banks can transparently calculate effective rate of interest. With change in the benchmark rate, the effective rate will also fluctuate in a maximum of three months.

There could be a time in everyone’s life when you decide you are done living in a rented house. Home loans are always available as a great option for this decision and can lend hands during tax payments too. Though the amount paid by the bank has to be repaid, it is worth spending this money on a property that is expected to appreciate at all times. Investment in land or property is always a safe and smart move!

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

How to Calculate Your EMI and Interest for Your Home Loan?

Calculate Home Loan EMI using MyMoneyMantra Home Loan Calculator. It is simple, free and convenient to use EMI Calculator for estimating monthly installments. All you need to do is share the loan amount, tenure and rate of interest and the Calculator will instantly share EMI for your home loan.

Simple steps to calculate home loan EMI & interest amount are:

Step 1: Click on MyMoneyMantra Home Loan EMI Calculator.

Step 2: Share home loan amount, housing loan interest rates and tenure.

Step 3: Submit these loan parameters and instantly get Loan EMI & interest rate cost.

Completing these steps you will get:

  • EMI
  • Total interest payable
  • Total amount payable
  • Amortization Schedule for loan

Calculating your loan’s EMI is thus instant and hassle free at MyMoneyMantra Platform. Furthermore, you need not visit each bank’s website separately to know about loan terms or EMI calculations. You can try different combinations and choose the most affordable one according to your pocket.

You should also know about mathematical EMI Calculation:

Home Loan EMI Calculation Formula:

EMI= [P x R x (1+R) ^ N]/ [(1+R) ^ N-1]

Here, EMI is Equated Monthly Instalment

P is Principal Amount (Loan Amount)

R is effective rate of interest

Latest Home loan interest rate in all banks are calculated on an annual basis. To calculate monthly home loan rate, divide annual rate by 12

For example, if the applicable home loan interest rate is 8%, your monthly interest would be 0.0066 (0.08/12 = 0.0066)

N – Loan tenure in months (EMIs to be paid)

So, if it is a 15-year home loan, N = 15×12 = 180

Additional Info: Also check SBI Home Loan EMI Calculator

Types of Home Loan Interest Rates 

A home loan can be availed of as a fixed rate loan or a floating/ variable rate variant. However, currently maximum lenders in India are offering floating home loan schemes only.

  • Fixed interest rate - As the name suggests, fixed interest rate of home loan results in fixed EMIs through the tenure. You can plan the budget for the entire tenure of the loan and thus there is no fear of escalating EMIs ever. However, this peace of mind comes at a higher cost than the floating rate interest. There is also a charge on foreclosure or prepayment of a fixed home loan.
  • Floating/ variable Home Loan - In this, interest rate changes as per fluctuations in benchmark lending rates. With change in any of the external benchmarks such as Treasury Bill yields or repo rates, your bank will also change your home interest rates and thus your EMI will adjust accordingly. However, the variable rate of interest is lower than fixed interest and there are no foreclosure or prepayment charges.

Some banks also offer combination schemes wherein the loan switches to a floating rate after initial few years. Based on your current repayment capacity and market situation choose the loan regime

Additional Info: Also check Pan Number for Banks

Interest Rate Conversion Facility on Your Home Loan

You now know that you can avail two types of interest rates for your house loan. What is interesting to know is what are the charges levied by various banks when you try to transfer your home loan interest rate from fixed to floating or vice versa as banks can charge on the conversion. Check out the table below to know the conversion fee applicable to changing from a fixed rate to a floating rate.

Additional Info: Also Check Tax Benefit on Second Home Loan

Banks/ NBFCsTransfer charges
Yes Bank0.50% of the principal outstanding
Kotak Mahindra BankAs applicable
PNB Housing Finance0.50% of the principal outstanding
State Bank of IndiaRs. 5000
HDFC LtdAs applicable
Bank of BarodaAs applicable

Additional Info: Also check and Apply for SBI Plot Loan

Example of Flat Rate & Reducing Balance Method of Interest Calculation

To understand mathematics behind your home loan EMI you must understand the difference between Flat Rate and Reducing Balance Rate Calculations. Opting for reducing balance method can save your more money as against the flat rate, on the same interest rate home loan deal.

Additional Info: You can also Check AnyRoR Gujarat Land Record

How? Let’s understand with the help of an example:

In flat rate method, the interest on home loan is calculated on the loan principal amount each month and thus EMIs are same during the tenure of loan. However, on reducing balance method, the interest rate will reduce each month/ EMI cycle. The calculation for instalment is made on the balance amount of principal after deducting the repaid principal amount. So reducing rate method is more affordable than flat rate method for the borrowers.

Let’s say, Mr A takes a Home Loan of Rs. 10, 00,000 at 10% p.a. for 10 years.  Here is how interest rate calculations will vary:

Loan Amount10,00,00010,00,000
Rate of Interest10% p.a10% p.a
Tenure10 years10 years
Interest CalculationFlat RateReducing balance
Total Interest9,99,9605,85,749
EMI16,66713,215
Total Payment16667 X 120 =  20,00,04013215 X 120 = 15,85,800
Saving2000040 -1585800 = 4,14,240

Additional Info: Also Check & Apply for Home Construction Loan

How to Reduce Home Loan Interest Rate Burden?

Home loan is a long term commitment that runs for several years. Though maximum loan tenure range is usually up to 30 years, most borrowers take 10-15 years to pay their loans. The smaller is the tenure, smaller is your interest liability. Thus, one of the best ways to reduce your home loan interest rate burden is to opt for lower loan tenure.

Additional Info: You can also avail Canfin Home Loan

Use any of the following paths to keep burden of current home loan interest rates low:

  • Prepay loan amount periodically: Your home loan EMIs are generally calculated on reducing balance method. So every time you repay your loan, the burden of interest reduces on the loan. One of the easiest ways to prepay your loan fast while keeping interest cost low, is pre-paying a fixed sum over & above the instalments at a fixed interval, say after 12 EMIs, each time. This will periodically cut down the loan principal and interest liability, thereby ensuring that your loan is repaid before the tenure. You can also schedule such payment with annual bonus, salary hike, business profits etc.
  • Pay higher EMIs: Another method to get the lowest home loan interest rate bank offer is to pay higher EMIs each month. There is no penalty on home loan prepayment and thus prepaying EMIs helps you cut your loan burden.
  • Balloon repayment: Continue with the scheduled EMIs & prepay the entire loan when you have surplus funds in hand.
  • Opt for balance transfer: Besides prepayment you may also opt for a lower interest rate offer from another lender and apply for best home loan interest rates. This will entail a nominal fee in the process however you can considerably reduce the EMI & interest burden.

Additional Info: You can also avail Navi Home Loan

Apply for Bank of Baroda Home Loan Online @ Rs. 751/Lakh* EMI

Apply for instant home loan online at Interest Rate starting from as low as 8.25% p.a. Pay EMI of just Rs. 751 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.

Home Loan Interest Rates FAQs

✅ Which Bank has the lowest home loan interest rate?

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Currently lowest home loan interest rate offer is available through Kotak Mahindra Bank and Citibank at 7.40% p.a. Other top banks offering minimum home loan interest rate are HDFC, ICICI, Bajaj Finserv & SBI. Home loan interest rates are at lowest levels in the past 15 years. Women borrowers can tap further concessions on the available rates.

✅ How to Get Lowest Home Loan Rates in India?

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Use professional advice and compare the best deals online to grab the lowest today home loan rate offer. Use EMI Calculator and negotiate for the best rate.

✅ What factors do banks consider before approving a Home Loan application?

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Factors that affect the home loan approval process include age, income & job/business stability, debt to income ratio, Credit Score, dependants, co borrower’s financial health, LAP etc.

✅ What are the minimum and maximum tenure for Home Loans?

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Home Loans are available at maximum flexible repayment terms. The tenure can range from 5 years to 30 years. Choose the lowest possible tenure to keep the interest burden low.

✅ Can a co-applicant apply for a home loan?

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Yes, home loan can be applied by co-applicants jointly. Normally the loan is availed in joint names to increase the loan eligibility. You can avail the loan jointly with spouse, children or parents.

✅ Is a balance transfer option available for a Home Loan?

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Yes, a balance transfer option is available for a Home Loan. You can avail of current best offers on new home loan interest rate by transferring your ongoing home loan to other bank. It is recommended to transfer a loan in the early years. A loan that has already been served, i.e. max interest liability is already being paid, should not be considered for balance transfer.

✅ Is a top-up facility available with Home Loan?

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The availability of top up facility will varies as per lender’s policy. However, in most cases, you will be eligible for the top up scheme if you have been regular in repaying your EMIs. The rate of interest on the top-up loan will be slightly higher than the Home Loan (still lower than personal loan), yet the approval & processing will be faster than a fresh loan application. You also get repayment flexibility with top up home loan.