Home Loan Interest Rates. Types, Eligibility, Factors to Consider, and More Details

Home Loan Interest Rates is the important factor one has be completely aware of if they are going to avail a home loan. Home Loan Interest Rates are applied on the home loan amount you take from a bank. Home Loan Interest Rates differ from each bank and one has to make the right choice in choosing the right type of home loan with lowest and best offered Home Loan Interest Rates.

Updated: Aug 30,2019 16:46 IST

Information on Home Loan Interest Rates

Apart from other financial sources, Home Loans stand as a major choice when a person is planning on purchase of new house or land or any extension/renovation works related to ones house. Most of the banks across India and few NBFCs (Non Banking Financial Company) come forward to offer Home Loans under different category. Home Loan Interest Rates are applied for the amount of home loan one avails, which is differs for each bank. In this article, we would help you to make the right choice of with detailed information on home loan interest rates. Every loan a person avails at the bank interest rates are one thing no one can avoid. The best thing to do is to choose the loan offered with lowest and reasonable interest rates. Home Loan Interest Rates range from 8.30% to 10.50% being the highest. But choosing the lowest doesn’t mean the right interest rate, there are other factors like processing fee, etc to check before going on with the process. We have made a good market research and given you data and information you can count on.

What are the Home Loan Interest Rates of Different Banks and Other Lending Institutions?

Most of the banks and other financial institutions are providing home loans for the people which are sometimes flexible according to the convenience of the applicants. Home Loan Interest Rates vary between banks. The below table is helpful for you to compare the home loan interest rates and charges of different banks and financial institutions.
 

 

Banks Providing Home Loans 

Home Loan Interest Rates

Processing Charges

HDFC Bank

8.70%-8.85%

Upto 0.50%

ICICI Bank

8.70%-8.95%

0.25%

Maximum-Rs.11,800

Axis Bank

8.35%-11.75%

0.5%

Indiabulls Home Loan

   

IDBI Bank

8.60% onwards

Upto 0.50%

Minimum Rs.2500

YES Bank

9.35%-10.50%

Upto 0.50%

Minimum Rs.10000

Oriental Bank of Commerce

8.40%-8.50%

--

Aditya Birla Housing Finance

8.50%-8.99%

Rs.5000-Rs.9000 + taxes

Aspire Home Finance

14%

2%

DBS Bank

8.65%

Rs.10000 + taxes

Federal Bank

9%-9.25%

0.5% of loan amount

PNB Housing Finance

8.85%-9.5%

1% more for loans on land

Upto 0.50%

Minimum Rs.5900

Sundaram BNP Paribas

8.75%-9.45%

Upto 0.50%

Minimum Rs.10000+ taxes

IDFC Bank

8.90%

Rs.10000 + taxes

LIC Housing Finance

8.40%

Minimum Rs.10000

DHFL

8.50%

1% on loan amount

Tata Capital

8.70%

0.2% on loan amount

Bank of India

8.70%

Rs.1000-Rs.20000(accordingly)

Syndicate Bank

8.75%

Rs.500-Rs.5000(accordingly)

United Bank of India

8.60%

Variable

IIFL

8.50%

0.75% of loan amount

Canara Bank

8.70%

Variable

 

What are the Types of Home Loan Interest Rates?

Home Loan Interest Rates vary from bank to bank and the types of the interest rates are also the ones which consider the interest rate percentage. Home Loan Interest Rates offered by very bank across India have two types of Interest rates i.e. (i) Fixed Interest Rates and (ii) Floating Interest Rates. 
  • Fixed Interest Rates: Fixed Interest are always higher when compared with Floating Interest Rates and remains same throughout the entire loan tenure. This helps you to plan your budget every month well in advance.
  • Floating Interest Rates: Floating Interest Rates change with changes market fluctuations but are based on current financial state of the economy. Majority of the Home Loan Interest Rates in India are Floating Interest Rates.

What are the Home Loan Interest Rates Factors Considered by Bank?

There are certain range of interest rates quoted by banks and the interest rates differ from bank to bank. Also, the interest rates differs for each individual who is applying for the loan and the bank fixes the interest rate based on many factors. Here are few parameters on which a bank fixes the interest rates on your loan request.
  • Your Credit Score/CIBIL Score - The first thing a bank checks on to fix the interest rates for the loan amount you have quoted for is your credit score. Credit Score of 750-900 is considered to be good range and there are chances of lower interest rates being approved by the bank. It is recommended that you maintain a good credit score.
  • Loan Amount - The loan amount you quote for influences the interest rate. The higher the loan amount there are chances of lower interest rates.
  • Interest Rates - The loan Interest differs based on the fixed or floating interest rate you are opting for. Information on fixed and floating interest rates are given above.
  • Time Period of the Loan - Banks are ready to provide lower interest rates on longer time period of the loan. 
  • Home Loan Type - Based on different requirements banks provide different type of home loans and the type of loan you choose determines the interest rate.
Other factors like qualification, years of experience, location of the property, etc determines the interest rates. The bank checks on each of the criteria and then fixes the interest rate.

What are the Home Loan Interest Rates Factors to be Considered by an Individual?

It is not considered wise by choosing to opt for bank that provides lowest interest rates but one should consider other factors. Sometimes bank gives the lowest interest rates but has other charges like preclosure charges, processing charges at higher rate. Few other factors are to be checked of the bank before proceeding, like customer service, proper document processing, earlier lending history, providing proper documents, etc. One should consider all the charges, loan tenure before deciding the bank from which the home loan is to be taken. To avoid regretting in future, plan well ahead of applying for loan and check if the loan amount is within your repayment limits. 

Checklist for applying Home Loan in a Bank

If you are looking forward apply for a home loan you will have to consider number of factors before choosing the suitable home loan and also right choice of the bank. Few of the factors to decide upon are listed below.
  • Interest Rates
  • Highest loan amount for your eligibility
  • Lowest processing fees
  • Lowest prepayment charges
  • EMI and loan tenure
  • Customer Review 
  • Lowest foreclosure charges
  • Loan tenure
  • Loan transfer charges
  • Documentation charges

Which are the Banks that Provide Lowest Parameters of Home Loan Interest Rates?

Nowadays with the increase in the population and easy availability of finance, many banks provide home loan at attractive interest rates. This encourages many people to dream of obtaining their own house. Though many banks provide home loans, only a few charge very low interest rates and low processing charges for the loan. For your reference, the banks which provide the cheapest home loan are given below.

Cheapest Home Loan - HDFC, Axis Bank, CitiBank, DHFL, IDBI, Union Bank of India, PNB, Bank of India, Dena Bank, Indian Bank, Allahabad Bank.
Lowest Processing Fee -  IDFC, Syndicate Bank

Key Information of Home Loan Interest Rate of Different Banks

Some of the key details related to home loan interest rates of different banks are provided for easy reference. 

HDFC Bank

  • HDFC Bank is one of the very popular bank and it provides home loans at interest rates varying between 8.35% and 8.85%.

  • It is charged with 0.5% of the loan amount or Rs.11800 whichever is lower as processing fee.

  • Loan tenure - 1 to 30 years

ICICI Bank

  • Interest rates for home loan ranges between 8.40% and 8.85%

  • For women borrowers, interest rates are 8.35% to 8.80%.

  • Loan tenure - 3 to 30 years

  • Processing fee is Rs.11800 or 0.5% of loan amount whichever is lower.

SBI Bank

  • Normal interest rates are charged between 8.35% and 8.70%.

  • Interest rates of home loan is charged between 8.30% and 8.65% for women.

  • Processing fee is 0.35% of loan amount or Rs.10000 whichever is lower.

  • The processing fee does not include the GST.

  • Loan tenure is upto 30 years.

Axis Bank

  • Interest rates for home loan ranges between 8.35% and 11.75%

  • Loan tenure - 1 to 30 years

  • Processing fee is Rs.10000 or 0.5% of loan amount whichever is lower.

TATA Capital

  • Interest rates for home loan ranges between 8.75% and 8.85%

  • Loan tenure is up to maximum 30 years

  • Processing fee is 0.2% of loan amount and additional taxes..

Oriental Bank of Commerce

  • Interest rates for home loans are charges at 8.40% to 8.50%.

  • To benefit their borrowers, there is no processing charges levied.

  • Loan tenure is upto 40 years.

  • This is one of the best choice for the borrowers as there are also no pre-closure charges and also with a long repayment period.

Indiabulls Home Loan

  • For borrowers, Indiabulls provides home loans at 8.40% to 10.05%.

  • Women borrowers get a discount on the home loan interest rates.

  • Women borrowers enjoy home loan at interest rates between 8.35% and 10%.

  • Processing charges for loan is 0.5% on the loan amount.

  • Loan tenure -1 to 30 years

How to Choose the Best Home Loan Interest Rates?

  • First decide upon the the loan amount you need.

  • Then decide on the type of home loan based on your need

  • Then decide on the type of Interest Rate

  • Based on your payment capacity on each month choose the loan tenure

  • Then choose the banks offering the lowest interest rates.

  • From these banks choose the ones with low processing fee and other charges.

  • Check for the customer reviews given for each bank.

  • Then check with the bank with your credit score and your eligibility.

  • Choose the bank that offers the expected loan amount with minimal interest rate and other charges.

An Overview on Home Loan Interest Rate 

When an individual is looking forward to take a home loan, the interest rates are the major challenge one has to face for the entire repayment period. Even a 0.10% percentage difference affects the interest cost drastically. Thus one has to make wise choices considering every single way to reduce the interest and other charges, and apply for the right home loan. Some banks charge different home loan interest rates for men and women. Women are given home loans at low interest rates than men to encourage women empowerment. On obtaining home loan, you can deduct tax for the interest paid towards home loan under Section 24 of the Income Tax Act.

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