check your eligibility

A Home Loan is the money borrowed from a bank or any other financial institution for construction, purchase, remodelling, or repair of a house. The loan will either be on a fixed rate of interest or floating rate of interest and will be repayable in equated monthly instalments (EMI). The repayment tenure is flexible and the maximum repayment period can go up to 30 years.  The asset created out of the finance so availed will be mortgaged to the bank/financial institution till the entire dues are repaid.

All the Home Loan Interest Rates from Top Banks

The salient features of the Home Loan are:

• Both salaried and non-salaried individuals in the age group 18 to 70 years can avail the loan
• The loan to value (LTV) offered is between 65% to 90%, depending on the property's value and loan amount.
• Security by way of mortgage of the asset created out of the finance or the house which will be remodelled should be available.
• The interest rates start from 8.55% (for SBI, as on 17.06.2019). A concession in rate of interest is available for women beneficiaries.

Processing fees can be between 0.50% to 1% of the total sanctioned loan amount.

Any assessee/taxpayer can benefit from a Home Loan. The benefit is by way of claiming tax benefit for the principal and interest components of the EMI paid towards the Home Loan. The various tax benefits that the taxpayer can avail are given below:

A deduction towards payment of the principal amount up to a maximum amount of 1.50 Lakhs can be claimed as per Section 80C. The condition stipulated for availing the benefit is that there is no permission to sell the house within 5 years of taking possession. If done, then the tax deduction claimed will be ploughed back and treated as income for the financial year when the sale transaction takes place.

A deduction for the payment towards the interest component up to a maximum limit of 2 Lakhs can be availed as Section 24. This benefit is available only if the house loan is availed for purchase or construction of the house. If availed for construction, the construction of the house should be completed within 5 years from the date of availing the housing loan.

If the loan amount doesn't exceed 35 Lakhs and the value of the property is not more than 50 Lakhs and the borrower does not own another property at the time of availing the loan, a deduction up to 50,000 is allowed under Section 80EE.

You can also claim stamp duty and registration charges under Section 80C up to a maximum of 1.50 Lakhs in the financial year when the expenses are incurred.

Here's the list of Home Loans from top banks with their interest rates (as updated on 10.06.2019):

Individuals are approaching banks/financial institutions seeking Home Loans for different purposes like purchase of a ready built house/flat, construction of a house, repair of a house, renovation of a house, and so on. Based on the requirement, the banks/financial institutions have devised various types of Home Loans. They are:

Home Loan for the purchase of a house/flat

This Home Loan is provided for either purchasing a house or flat. In the case of a house, it will be ready to occupy, but in the case of flat, it could be a ready to occupy or for a flat under construction.

Home Loan for construction of a house

A Home Loan will be given for construction of a house on a plot already owned by the borrower or for purchase of a plot and construction thereon. Here the loan will be disbursed in stages as the construction progresses. Also, the margin stipulated will be collected on a pro-rata basis. The borrower should begin construction of the house within 12 months from the date of the first disbursement and should complete the construction within 3 years from the date of the first disbursement of the loan.

Home Loan for renovation/repair of a house

The components that can be included to avail Home Loan for renovation/repair of a house is plumbing work, electrical work, painting of the house (both interior and exterior), laying of tiles, woodwork, and so on. The loan will be given for anything that is required for remodelling the house.

Takeover of Home Loans from other banks/financial institutions OR Home Loan Balance Transfer

If you are paying higher interest for your existing Home Loan then you can opt for transfer of the balance in the existing loan to any other bank/financial institution that is offering a better rate of interest as compared to the existing loan. The EMIs will be paid to the bank/financial institution which takes over the outstanding balance of the existing loan.

The following are some basic eligibility criteria for most of the Home Loan schemes:

• The age of the applicant should be between 18 years to 65 years
• Salaried and non-salaried applicants are eligible for the loan
• Salaried individuals employed in State/Central Government Departments, PSUs, Reputed Companies, Corporates, etc., are eligible for the loan.
• The salaried individuals should have a minimum work experience of 1 year with the current organisation and at least 2 years of experience with the previous organisation.
• The self-employed individual should have been in the present business for at least 3 years and the overall experience should be a minimum of 5 years in business.
• Salaried individual should have a minimum income of 25,000 p.m. and the self-employed individual should have a minimum gross annual income of 3,00,000.
• The minimum and maximum loan quantum will depend on the bank/financial institutions from where the loan is being availed.
• The applicant should have 40% of the net take home salary after meeting the existing commitments and the EMI of the proposed loan.
• The margin stipulated will range from 10% to 35% depending on the financial institution from where the loan is being availed.
• The maximum loan tenure available is 30 years

The eligibility factors may differ from lender to lender.

Key features of Home Loans from the  top 5 banks are detailed below:

Canara Bank Home Loan

The key features of Canara Bank Home Loan are:

• Eligibility:
  • The age of the applicant should be below 60 years at the time of availing the loan and the entire liability should get cleared before the applicant attains the age of 70 years.
  • A salaried individual should have a minimum experience of 3 years
  • Self-employed individuals and businessmen should have a minimum of 3 years' experience in the present business.
  • All Non-Resident Indians (NRI) having a valid Indian Passport and Persons of Indian Origin (PIO) are eligible for the loan. The applicant should have NRI status for a minimum period of 3 years and should have been employed abroad at-least for a period of 2 years.

• Purpose: The loan will be sanctioned for the purchase/construction of a house/flat. The loan can be availed for repairs and renovations also.

• Quantum of loan: Loan up to 4 years annual salary as per IT Returns of the previous financial year in case of salaried individuals. In the case of self-employed individuals and businessmen, an average of 4 years' gross income as per ITAO.

• Margin: 10% to 25% margin is stipulated depending upon the quantum of the loan and the age of the house if the ready-built house/flat.

• Security: The asset created out of the finance should be mortgaged

• Repayment: Maximum repayment period is 30 years or the borrower attaining 70 years of age whichever is earlier. Repayment holiday period of 2 months from the date of availing the loan for the purchase of ready-built house/flat. For a loan availed for construction, repayment holiday is 2 months after completion of construction or 24 months from the date of the first disbursement whichever is earlier.

• Processing charges: At 0.50% of the loan amount with a minimum of 1,500 and a maximum of 10,000 will be collected.

• Pre-payment charges: In case of takeover of loan by other banks/ Housing Finance Institutions, no prepayment penalty will be levied for floating rate of interest Housing Loans.

Kotak Mahindra Home Loan

The key features of the loan are:

• Eligibility:
  • The applicant should be in the age group between 18 to 60 years if salaried and 18 years to 65 years if self-employed.
  • The minimum income of salaried individuals should be between 15,000 for Delhi, Mumbai, Chennai and Pune and 20,000 for other cities. For self-employed individuals and businessmen, minimum income should be between 1,80,000 p.a. for Delhi, Mumbai, Chennai and Pune and 2,40,000 for other cities.
  • Minimum experience of 3 years in the present job for salaried individuals and the self-employed individuals and businessmen should have been in the business for a minimum of 3 years.
  • The minimum qualification of the applicant should be graduation if employed in the private sector.
  • In case of HUF, the HUF should have been in existence for a minimum of 3 years
  • The Karta of HUF should be the co-applicant for the loan

• Purpose: For construction/purchase/repairs/renovation of a house

• Quantum: Depending on the income of the applicant

• Security: Mortgage of the asset created out of the finance

• Repayment: Maximum repayment period is 20 years

• Processing charges: Nil if applied online. Otherwise, 1.25% of the loan amount. Flat 5,000 for women applicants.

• Pre-closure charges: Nil if a floating rate of interest is opted. If a fixed rate of interest is opted, then 4% of the outstanding principal amount.

ICICI Bank Home Loan

The key features of the loan are:

• Eligibility: Salaried individuals, self-employed individuals/professionals, and NRIs can avail the loan.

• Purpose: For the purchase/construction/renovation/repair of a house

• Quantum: Quantum of the loan depends on the income of the applicant

• Security: Mortgage of the asset created out of the finance

• Repayment: A maximum repayment period of 30 years is available

• Processing charges:50% to 1% of the sanctioned loan amount 2,000 for Delhi, Mumbai, and Bangalore ( 1,500 for other cities), whichever is higher plus applicable Service Tax and Surcharge.

• Prepayment charges: For a loan with a floating rate of interest, no prepayment charges. For a loan with a fixed rate of interest, pre-payment charges at 2%-4% of the outstanding loan amount will be charged.

Bank of Baroda Home Loan

• Eligibility: All resident and Non-resident Indians in the age group 21 years to 70 years are eligible for the loan.

• Purpose: For purchase of a house/flat and construction of a house. Reimbursement of the cost of the land purchased 24 months prior to applying the loan is eligible.

• Quantum: The maximum loan quantum is 1 Crore in rural and semi-urban areas and 5 Crores to 10 Crores in the metro cities.

• Security: Mortgage of the asset created out of the loan

• Repayment: Maximum repayment period is 30 years

• Processing charges: 0.50% of the loan amount for a loan up to 50 Lakhs (minimum 7,500 maximum 12,500) and 0.25% of the loan amount for loan above 50 Lakhs (minimum 7,500 and maximum 20,000).

• Pre-payment charges: Nil

Indian Overseas Bank Home Loan

• Eligibility:
  • Salaried Individuals/self-employed individuals who are no more than 55 years are eligible for the loan.
  • Members of Societies and businessmen are also eligible for the loan.
  • Salaried individuals should have a permanent job with a minimum of 2 years of experience and self-employed individuals should have been in existence for at least a period of 3 years.

• Purpose: For purchase/construction of a house/flat

• Quantum: A maximum of 75% to 90% of the value of the property will be provided

• Security: Security by way of mortgage of the asset created out of the finance

• Margin: Margin will be set in the range of 10% to 25%

• Repayment: The maximum repayment period is 30 years

• Processing charges: 0.50% of the loan amount with a maximum of 20,000 for a loan below 75 Lakhs and 25,000 for a loan above 75 Lakhs will be collected.

• Pre-closure charges: Nil

To get the best Home Loan rates, follow the tips mentioned below:

Ascertain your loan eligibility and EMI

Comparing the offers of different bank's is very crucial if you want to get the best deal. To begin with, you should have an account of your present commitments that form a part of your monthly expenses. Assess the loan quantum by charting out the estimate of the project you intend to take a loan for. Once these are ready you will be able to calculate the EMI based on the tenure you opt for and the rate of interest you choose. You arrive at the EMI which will best suit your income. You can use MyMoneyMantra's EMI Calculator for accurate EMI calculation purpose.

Compare the offers from different banks. You should consider the processing charges that are collected also to arrive at the cost of the loan. You will now have the EMIs and the eligible quantum of loan from different banks and you can choose the best deal that will suit your pocket.

Verify the legal documents of the property

If you are buying a flat, it is better to approach the bank which has approved the project. If you are buying a ready-built house then check for the line of documents from the original owner to the present owner. The approved plan should be available. Then shortlist the banks that agree to give a loan for the property you intend to buy. Make a list of the banks that are agreeable to finance for the property you choose to buy.

Choose from the various types of Home Loan

Now that you have made a list of banks with different offers the next ordeal is to decide whether you want to go for a fixed rate of interest or the floating rate of interest. The fixed rate of interest will be priced a little higher but will remain constant during the loan tenure whereas the floating rate of interest keeps changing with the periodical changes that the financial institutions make in their rates.

There is also a Home Loan variant with an overdraft facility. This is suitable for the non-salaried people who are into businesses which are seasonal in nature and the cash flow is not constant. This overdraft facility enables you to make a deposit as and when you have a surplus amount. This will reduce the interest outgo towards the loan.

Study the offers of the banks in the list

Apart from the interest rates, you will have to run through the other charges like the insurance premium, prepayment charges, processing charges, legal charges, and so on, which will impact the cost of the loan.

Ascertain the quality of service rendered

Consider the time taken for the entire process from the appraisal to the approval and disbursement of the loan. A loan that is not available at the right time does not serve the purpose. Also, understand the tendency of MCLR fluctuation.

After the entire ordeal step-by-step is completed and you are convinced of the best deal, go for the loan.

For Salaried Employees

• Duly filled application form for a Home Loan
• Two photographs of the applicant in passport size
• ITR records from the last two years
• Proof of identity such as the applicant's Passport/ PAN Card/ Voter ID/ Driving License
• Proof of Residential Address such as Registered Rent Agreement/ Leave and License/ Utility Bill of at least three months/ Passport.
• Proof of Income such as the last six months' salary slip, Form 16 of two years, Bank statement of at least last six months that reflects salary being credited or EMI being debited.
• All the legal, property-related documents like past title chain. For e.g. conveyance deed, allotment letter, sales deed, latest property tax receipt, possession letter, copy of the approved plan of construction or extension.

For Self-Employed

• Duly filled application form for a Home Loan
• Two photographs of the applicant in passport size
• Proof of identity such as the applicant's Passport/ PAN Card/ Voter ID/ Driving License
• Proof of Residential Address such as Registered Rent Agreement/ Leave and License/ Utility Bill of at least three months/ Passport.
• Proof of Business like VAT/ service tax registration/ company's incorporation details
• Address proof of the business, accounts and balance sheets showing profit and loss statements which have been certified by a CA.
• The proof of the business's existence, a copy of the partnership deed and business profile
• All the legal, property-related documents like past title chain. For e.g. conveyance deed, allotment letter, sales deed, latest property tax receipt, possession letter, copy of the approved plan of construction or extension.

The factors that affect the Home Loan interest rates are:

• Credit score: Before taking a credit decision, financial institutions check your credit score which is based on your credit history. A good score indicates good financial management which is the most expected from the lenders. The better the score the lower will be the rate of interest.

• Margin: If the margin brought by you is higher, the loan component will reduce which will in turn reduce the interest outgo.

• The loan tenure: Shorter loan tenure is recommended because it will reduce the interest outgo. If a higher EMI is affordable, then choosing a shorter tenure will be beneficial as it will reduce the interest outgo.

• Type of interest rate: The two types of interest rates are the floating rate of interest and the fixed rate of interest. The fixed rate of interest will be higher than the floating rate but it will remain constant till the loan tenure. However, a floating rate of interest is fluctuating. If the MCLR of the banks increases, your interest rate also will increase and so will the EMI. This may disrupt your budget. But in the case of fixed rate of interest your EMI will remain unchanged.

In order to get the best deal, the offers of different banks/financial institutions have to be compared. For this, it is necessary to collect the data regarding the interest rates and other charges from different lenders which would be a very hard task if you had to do it all by ourselves. MyMoneyMantra has all the details collated on a single screen which is very convenient. So, you can compare the offers and choose the best deal in no time. Also, our Mortgage Specialists will help you through the whole process of availing the loan.

You should follow the simple steps shown below to apply for a Home Loan through MyMoneyMantra.

1. To begin with, access the website of MyMoneyMantra
2. Select your gender and continue
3. Select the city where you reside
4. Choose the purpose of loan. It could be purchasing a residential property, residential plot, residential plot and construction or home extension loan. There is a separate procedure for each of these loans.
5. Next you will have to choose the city where the property is located
6. Enter the approximate market value of the property
7. Give details of your annual income
8. Enter the loan amount required
9. A few more personal details have to be given
10. Enter your email address and phone number
11. Accept the conditions to continue
12. An OTP will be sent by MyMoneyMantra
13. Enter the OTP and your application will be submitted
14. From there on the team from MyMoneyMantra will handle it all for you and provide experienced assistance throughout the way.

What are the factors looked into by banks while granting a Home Loan?

The banks consider the following while granting a Home Loan

• Credit Score
• Applicant's income
• Stability of job/business
• The income of the spouse
• Dependants
• Status of the applicant-whether resident or non-resident
• Management of existing commitments

What are the minimum and maximum repayment periods of Home Loans?

Home Loans are generally opted for longer terms. Generally, the repayment period ranges from 5 years to 30 years.

Can the loan be availed in joint names?

Yes, the loan can be availed in joint names. 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?

Yes, a balance transfer option is available for a Home Loan.

Can a top-up loan be availed for the Home Loan?

A top-up loan can be availed for the Home Loan provided the earlier EMIs have been serviced regularly. The rate of interest on the top-up loan will be slightly higher than the Home Loan.