Karnataka Bank Home Loan Interest Rates
Interest Rate

Starting @ %

Check Best Offers
Processing Fee


Loan Tenure

- years

Lowest EMI Per Lakh

₹  for years

Prepayment Charges

Nil charges for floating rates loans

check your eligibility


About Karnataka Bank

Karnataka Bank has an illustrious history that dates back to the pre-independence period in India. The year was 1924 when nationalistic fervour was at its best. Karnataka Bank was formed on February 18, 1924, at Mangalore (now known as Mangaluru), a coastal town in Dakshina Karnataka. Smaller banks like Sringeri Sharada Bank Ltd, Bank of Karnataka, and Chitradurga Bank Ltd merged with Karnataka Bank Ltd on its way to becoming a scheduled bank.

Today, the bank is marching towards a century of its existence with a grand network of 840 branches spread over 22 states and two union territories. It is one of the leading banks in the private banking sector in India.

Karnataka Bank Home Loan

Karnataka Bank offers various deposit and loan products, of which the Home Loan is a perennial favourite. Karnataka Bank has distinct Home Loan products to cater to all Home Loan requirements. It includes loans for purchase or construction of your home. Loans are available for carrying out repairs and renovations, as well. Karnataka Bank offers attractive loans for furnishing your house. Customers can avail Karnataka Bank Home Loan for the purchase of residential plots. Top-up loans are also available to meet your personal requirements. 

Some of the salient features of Karnataka Bank Home Loans are the competitive interest rates and exciting service charges on offer. Karnataka Bank is also a frontrunner in the PMAY-Urban loan segment.

Karnataka Bank - Home Loans on Offer

KBL Apna Ghar


  • Purchase of house or flat
  • Construction of house
  • Repairs, renovation, or remodelling of existing house/flat

Maximum amount

  • 5 Crores for purchase/construction of a house
  • 30 Lakhs for repairs and renovations


  • Attractive rates of interest
  • Flexible repayment tenure extending up to 30 years for purchase or construction of the house/flat and 7 years for repair and renovation of an existing house/flat.
  • Loans available to salaried persons, businessmen, professionals, self-employed persons, and agriculturists.
  • Individuals who India resident as well as NRIs holding an Indian passport can apply.
  • Easy eligibility norms
KBL Home Comfort


Furnishing your house, purchasing furniture and fixtures, installing solar heating systems.

Maximum amount

1 Crore


  • Extended repayment period up to 120 months
  • Competitive rates of interest
  • Who are existing borrowers of KBL-Apna Ghar can apply
  • Who have not procured any loan from any financial institution for their residential property or closed the housing loan already availed can also apply.
KBL Ghar Niveshan


Purchase of a residential plot of land

Maximum amount

50 Lakhs or 80% of the registration value of the residential site, whichever is less


  • Flexible repayment tenure up to 60 months
  • Agriculturists get an option to pay the instalments annually
  • Individuals who India resident as well as NRIs holding an Indian passport can apply.
KBL Home Top-Up


To meet personal requirements

Maximum amount

Up to 1 Crore


  • Existing borrowers of KBL-Apna Ghar or KBL Home Comfort can avail this facility to meet any personal requirement such as medical emergencies, education of children, and so on.
  • Individuals who India resident as well as NRIs holding an Indian passport can apply.

Karnataka Bank Home Loan Interest Rates

Karnataka Bank announces its Marginal Cost of Funds-based Lending Rates (MCLR) from time to time. Generally, the interest rates of Karnataka Bank are linked to the 1-year MCLR, but the KBL Apna Ghar scheme interest rate relates to the 6-month MCLR.

Karnataka Bank MCLR - with effect from September 01, 2019

Tenor Overnight One-month Three-month Six-month One-year







Karnataka Bank Home Loan Interest Rate Structure

Schematic Loans - Interest Rate The effective rate of interest

KBL Apna Ghar - linked to 6-month MCLR

For loans up to 75 Lakhs: 8.90%

For loans above 75 Lakhs: 9%

KBL - Home Comfort

For tenure up to 60 months: 10.05%

For tenure more than 60 months: 10.45%

KBL Ghar Niveshan


KBL Home Top Up


Karnataka Bank Home Loans Interest Rates - Points to Note

  • The rates mentioned above are effective (minimum with the spread) from August 01, 2019
  • Karnataka Bank Home Loans for the KBL Apna Ghar Scheme starts from the six-month MCLR rate. The effective spread is from 8.70% to 10% depending on different factors. The mean rate for the bank in this segment is 9.73%.
  • Karnataka Bank Home Comfort Scheme rates of interest are linked to the one-year MCLR. The effective spread starts from 9.75% and goes up to 10.75% with the mean rate being 10.25%.
  • The rates of interest depend on various factors:
    • The loan amount is a defining factor. Loans up to 75 Lakhs have a lower rate of interest in comparison with loans above 75 Lakhs.
    • The repayment tenures have a vital role to play. The rates of interest on loans with repayment tenure less than 60 months come cheaper when compared with loans with extended tenures.
    • The occupation of the borrower and the regularity of income is a crucial factor. Similarly, the repaying capacity has a role, as well. The credit history and CIBIL score is critical. Borrowers with a lower CIBIL score end up with a higher rate of interest and vice versa.
    • Plot loans are expensive when compared to loans for the purchase of readymade house or construction of a home.
    • The rate of interest on loans under PMAY to eligible borrowers is the same as that of the regular Home Loans.
    • The present rate structure is effective from August 01, 2019. The MCLR changes every month, but the resetting of the MCLR-linked interest rate is not immediate.

Karnataka Bank RLLR - Repo Rate Linked Lending Rates

RBI has decreased the repo rates sufficiently and urged all banks to switch to an external benchmark-linked lending rate before October 01, 2019. Many banks have linked their retail loan portfolios with the repo rate. Karnataka Bank has yet to decide on this aspect. RBI has initiated this move because surveys show that banks are lagging in passing on the benefits of market-rate cuts to their customers. The MCLR-linked rate structure is a market rate-related structure. Despite this fact, the resetting of interest rates to the MCLR is slow. One expects Karnataka Bank to come up with its RLLR soon.

Karnataka Bank Base Rate

The RLLR will come into effect the latest by October 01, 2019. MCLR is in force since April 01, 2016. Before the MCLR concept, Karnataka Bank adapted to the Base Rate structure. The bank has provided an option to customers to switch over to the MCLR. However, the bank has several customers opting for the Base Rate structure for their loans. Hence, Karnataka Bank announces its Base Rate at regular intervals. The present Base Rate of Karnataka Bank is 10.55% with effect from April 01, 2019.

Karnataka Bank Home Loan - Interest Calculation and Repayment Modes

Karnataka Bank calculates the Home Loan interest rate on a floating rate basis by adapting to the daily reducing balance method. Therefore, the rates of interest on Home Loans change with every reset. The resetting schedule depends on the bank's internal policies.

The ideal mode of repayment of a Karnataka Bank Home Loan is EMI. The bank provides an option to the borrower to service the pre-EMI interest by way of tranche-based EMI payments. It is useful in the case of Home Loans where the disbursement is in instalments. The regular EMI starts from the month following the date of the disbursement of the final instalment.   

The EMI comprises of the interest and principal component. These components change every month, depending on regular repayment. The overall EMI remains the same.

How to Calculate Your Loan EMI?

Karnataka Bank offers the facility of EMI Calculator on their webpage. This calculator is easy to use. Entering the following details gives you the EMI and interest payable amount instantly.

  • Principal loan amount
  • Contracted interest rate
  • Repayment tenure

A similar calculator is available with MyMoneyMantra. Customers can use this calculator as well to determine their interest and EMI obligations.

Karnataka Bank Home Loan - PMAY

Karnataka Bank is a frontrunner in PMAY in many areas in its home state, Karnataka. The bank is committed to fulfilling the Government's initiative of ensuring a home for every Indian citizen by 2022. The highlight of PMAY is the availability of an upfront interest subsidy to reduce the EMI burden of the PMAY beneficiaries.

PMAY - Upfront Interest Subsidy Concept

Every PMAY beneficiary is eligible for an interest subsidy depending on the category to which the borrower belongs.

  • Economically weaker section (EWS): Annual family income up to 3 Lakhs
  • Low-Income Group (LIG): Annual family income higher than 3 Lakhs and up to 6 Lakhs
  • Middle-Income Group-I (MIG-I): Annual family income more than 6 Lakhs and up to 12 Lakhs.
  • Middle-Income Group-II (MIG-II): Annual family income higher than 12 Lakhs and up to 18 Lakhs.

The interest subsidy is different for each group discussed above. The subsidy amount depends on the loan amount, as well. An essential point to note is that the overall loan eligibility does not have any bearing on the subsidy. There is a restriction on the loan amount eligible for the subsidy.

  • EWS and LIG: Maximum loan amount eligible for subsidy is 6 Lakhs
  • MIG-I and MIG-II: the maximum loan amount for calculation of subsidy is 9 Lakhs and 12 Lakhs respectively.

There is a ceiling on the subsidy amount for each borrower category:

  • EWS and LIG: The rate of subsidy is 6.5% with the maximum subsidy amount being 2.67 Lakhs
  • MIG-I: The maximum subsidy amount is 2.35 Lakhs with the rate of subsidy as 4%
  • MIG-II: The rate of subsidy is 3% with the subsidy amount as 2.30 Lakhs

 PMAY - Subsidy Treatment

PMAY interest subsidy is an upfront subsidy that is credited to the loan account immediately. Therefore, the loan amount reduces to that extent. Consequently, EMI reduces considerably. These aspects are the benefits of the PMAY loan.

Karnataka Bank Home Loan Interest Rates - FAQs

Does Karnataka Bank have an external benchmark rate linked retail loan product?

Karnataka Bank bases its interest rate on the MCLR. The marginal cost of funds-based lending rate links to market-related forces. However, it does not have a directly linked external benchmark rate-connected retail loan product. Other banks have switched to the RLLR concept, whereas Karnataka Bank follows the MCLR interest rate structure.

When will Karnataka Bank shift to the RLLR concept?

RBI has urged all Indian commercial banks to switch over to an external benchmark rate-linked interest rate structure for its retail loans. Citibank is the first bank to link to the 3-month T-bill rate in 2018. State Bank of India and other nationalised banks have announced their retail loan products linked to the repo rate. Karnataka Bank will also shift to the RLLR concept before the deadline of October 01, 2019.

What prompted the RBI to direct banks to switch over to an external benchmark rate?

RBI observed that banks were reluctant in passing over the benefits of market rate fluctuations to the customer. The idea behind linking interest rates to the market rate is that the ultimate customer should benefit. As banks were lagging in this regard, RBI had to come up with stringent directives.

Do banks have the freedom to choose the external benchmark rate?

Yes, banks are free to choose any external benchmark rate published by Financial Benchmarks India Ltd (FBIL). Citibank has chosen the 3-month T-bill rate, whereas SBI and other banks prefer the repo rate. Compared to the volatility of the T-bill and different market rates, the repo rate is stable. Reserve Bank of India announces the repo rates from time to time. It is more of a banking-related rate when compared to others.

Will the customer get the immediate benefit of the repo rate reduction?

In the MCLR interest rate structure, the effective rate for the borrower changes when the bank resets the rate. It does not happen with every revision in the MCLR. On the other hand, the repo rate directly influences the RLLR. The banks reset the RLLR from the first day of the month following the date of announcing of the repo rates by the RBI.

Will the Home Loan EMI change with the change in the interest rate structure?

Typically, the EMI should change and move in the same direction that the rates do. However, most of the banks, including Karnataka Bank, prefer to extend or reduce the loan tenure instead of changing the EMI. The ultimate objective is to pass on the benefit to the customer.

Is this move by Karnataka Bank beneficial to the customer?

In the case of a reduction in the interest rates, the loan tenure reduces. The borrower benefits because the loan account closes earlier than usual. In the case of an increase in the rates, the bank extends the loan tenure. It results in a higher interest burden every month. Therefore, the loan takes a comparatively longer time to liquidate. Secondly, the compounding interest factor comes into play. Thus, increasing the EMI should be a better option for the customer.

How do you repay the Karnataka Bank Home Loan?

It is possible to repay the Karnataka Bank Home Loan in various ways:

  • Set up a standing instruction in your savings or current account whereby the bank deducts the Home Loan automatically on a pre-determined date.
  • Submit post-dated cheques for repayment. This procedure would require the borrower to replenish the PDCs frequently.
  • Give an ECS mandate to Karnataka Bank Ltd. This feature is the best way to repay your loan when you do not have an account with Karnataka Bank.
  • Use internet banking or mobile banking facility to transfer funds from your savings accounts to your loan accounts.
  • Pay cash directly into your loan account

Does Karnataka Bank charge any foreclosure fees?

Karnataka Bank does not charge any Home Loan foreclosure fees for a floating rate of interest loans of individual borrowers.

Can I switch over from the Base Rate to MCLR at any time?

Yes, Karnataka Bank allows the switch over from the base rate mechanism to the MCLR structure on the payment of a conversion fee. The vice versa is not permissible. 

Karnataka Bank Home Loan Interest rates - Latest News and Snippets

Karnataka Bank cuts its MCLR by ten basis points.

Karnataka Bank has cut its MCLR by ten basis points on its one-year MCLR with effect from September 01, 2019. This reduction is a result of the RBI slashing repo rates to 5.40 recently.

OTP is sent to your mobile number

Enter OTP

Resend OTP