Latest Home Loan Interest Rate of All Banks in India

home loan interest rate all bank

6 mins read

Last updated on 15th April 2024

Table of Contents

In an ever-evolving financial landscape, the quest for the ideal home loan remains a pivotal aspect of many individuals' financial planning. As the heart of this quest beats the interest rate, a figure that can significantly influence the overall cost of a home over time. In this blog, find the current home loan interest rates from various public and private sector banks in India. Further, the blog also shares insights on the factors involved in deciding the ROI and how to calculate it for your home loan. Keep scrolling!

List of Banks and their Rate of Interest

Navi Home Loan 8.55% - 9.75%
PNB Housing Finance Ltd 8.50% - 11.45%
Bajaj Housing Finance Ltd 8.35% - 10%
L&T Housing Finance Ltd 8.60% - 10.30%
Federal Bank Financial Services 8.5% - 10.30%
IDFC first 8.6% - 9.25%
Kotak Bank 8.50% - 9.60%
ICICI Bank 8.60% - 9.40%
HDFC Ltd 8.35% - 9.85%
HDFC Bank 8.55% - 9.10%
TATA Capital Housing 8.50% - 12%
SBI 8.50% - 9.65%
Fullerton Grihashakti 9.5% - 15%
Capri Home Loan 9.5% - 16.75%
Aditya Birla Housing 8.70% - 14.75%
llFL Home Loan 8.50% - 11.50%
ICICI Home Finance 8.75% - 12.25%
Aadhar Housing Finance 11.5% - 17%
Shubham 9.9% - 16%

Suggested read: Best Banks for Home Loan

How to calculate interest on your home loan?

In general, home loans are long-term loans and it is important to figure out your overall interest liability towards the loan in the first place.
You can calculate the same using one of the two methods listed below:

Using an EMI Calculator

This tool simplifies the calculation of your home loan interest. Input the required details into the EMI calculator, which typically includes:

  • The Home Loan Amount
  • The Loan Repayment Tenure
  • The Rate of Interest

Once you enter these details and hit the ‘Calculate’ button, the calculator provides a comprehensive breakdown of your loan, including the total interest payable.

EMI Calculation Formula

If you prefer a more hands-on approach, you can use the following formula to calculate your monthly EMI for the home loan:

EMI [P x r x (1+r)^n]/[(1+r)^n-1]

In this formula, 'P' represents the Principal amount, 'r' is the monthly interest rate, and 'n' is the total number of installments or the loan tenure in months. To find the monthly interest rate, divide the annual rate by 12. 

Suggested read: Top Bank for Home Loan in India

Types of Home Loan Interest Rates in India

In India, home loan interest rates typically fall into two main categories, with variations within these categories. Here's an overview of the types of interest rates you might encounter when taking a home loan in India:

1. Fixed Interest Rate

As the name suggests, a fixed interest rate remains constant throughout the loan tenure. This rate is not affected by market fluctuations. Borrowers who prefer stability and predictability in their EMI payments often opt for this type of interest rate.

2. Floating Interest Rate

This type of interest rate fluctuates based on the market dynamics and the benchmark rates set by the Reserve Bank of India (RBI). The most common benchmark used is the Repo Linked Lending Rate (RLLR). Floating rates are generally preferred when there is an anticipation of a decrease in interest rates in the future. They typically start lower than fixed rates but can vary over time.

3. Mixed Interest Rate

Some lenders offer a mixed or hybrid interest rate, where the interest rate is fixed for a certain initial period and then converts to a floating rate. This option allows borrowers to enjoy the stability of a fixed rate initially and then the potential benefits of a floating rate later.

Factors Determining Your Home Loan Interest Rate

The interest rate on a home loan is a critical factor for borrowers, as it directly affects the cost of borrowing and the amount of the monthly installment (EMI). Several key factors determine the interest rate on your home loan:

1. Credit Score

Your credit score is perhaps the most crucial factor. A high credit score indicates good creditworthiness and responsible repayment behavior, which can help you secure a lower interest rate. Conversely, a lower score may lead to a higher interest rate.

2. Loan Amount and Tenure

The amount of loan you take and the duration for which you take it can influence the interest rate. Generally, higher loan amounts or longer loan tenures might attract higher interest rates due to the increased risk to the lender.

3. Type of Interest Rate (Fixed or Floating)

Fixed rates are usually higher than floating rates at the outset because they provide the certainty of fixed repayments. Floating rates, although initially lower, can fluctuate with market conditions.

4. Income and Employment Stability

Lenders consider your income and the stability of your employment. Higher and stable income, especially from reputed organizations, can instill confidence in lenders, potentially leading to more favorable interest rates.

5. Property Location and Characteristics

The location, age, condition, and type of property you're purchasing can affect the interest rate. Properties in prime locations or those from reputed builders may get more favorable rates.

6. Loan to Value Ratio (LTV)

This is the ratio of the loan amount to the appraised value of the property. A lower LTV ratio (meaning a higher down payment) reduces the lender's risk, potentially leading to a lower interest rate.

7. Government Policies and Subsidies

For certain categories of borrowers, government policies and subsidies can play a role in determining interest rates. For example, under the Pradhan Mantri Awas Yojana (PMAY), eligible borrowers can avail of home loans at subsidized rates.

Suggested read: Pradhan Mantri Awas Yojana

Navigating the dynamic world of home loan interest rates can be a daunting task, yet it remains a crucial aspect of financial planning for prospective homeowners. This comprehensive exploration of the latest rates across various banks serves as a guidepost in this complex journey. While the information presented offers a snapshot of the current market, it's important for individuals to continuously stay informed and consider their unique financial circumstances when making decisions. Homeownership is not just a financial commitment but a significant life milestone. Therefore, aligning with the right loan, backed by thorough research and understanding of the latest trends and rates, paves the way for a more secure and fulfilling homeownership experience. Remember, the best loan is not just about the lowest interest rate, but the right fit for your financial future.

FAQs About Home Loan Interest Rate of All Banks in India

The bank offering the lowest interest rate for a home loan varies, and it's advisable to compare rates from different banks. As of the latest information, Bank of India is among those offering competitive rates, starting from 8.30% p.a. for various loan amounts.

The Reserve Bank of India (RBI) does not set home loan interest rates directly. Instead, these rates are determined by individual banks based on various factors, including the RBI's policy rates and market conditions. It's recommended to check with individual banks for their current rates.

Specific banks, such as State Bank of India and HDFC, are known to finance up to 90% of a property's cost. However, the exact percentage can vary based on the borrower's eligibility and the bank's lending policy.

To reduce your home loan rate, consider negotiating with your current lender, exploring balance transfer options to a different lender offering a lower rate, maintaining a strong credit score, and opting for a shorter loan tenure if feasible.

To secure the lowest home loan rates, compare rates from various lenders, maintain a high credit score, choose a suitable interest rate type (fixed or floating), and negotiate terms based on your creditworthiness and relationship with the bank.

Yes, you can request banks to reduce your home loan tenure. This usually results in higher EMIs but can save on the total interest paid over the loan period. It's important to discuss this with your bank and ensure it aligns with your financial capacity.

Banks offer different rates for self-employed individuals based on their credit profile and business stability. It's advisable to compare offers from various banks to find the most favorable rate. Banks like HDFC and SBI are known for their competitive rates for self-employed individuals.

You can calculate the total interest payout for your home loan using an EMI calculator available on many financial websites. You'll need to input the loan amount, interest rate, and tenure. Some banks also provide detailed amortization schedules that show the interest payout over the loan period.

Published on 18th August 2023