Home Loan Interest Rates: All you Need to know

Getting a home loan was never been easier, as today you can do online home loan comparison based on interest rates along with other loan terms and conditions of all banks before choosing the right loan offer. Home loan interest rates are offered by different banks to its customers in India. The normal range of Home loan interest rates are from 8.25% to 14.00%.

In addition to leading public sector banks, government banks, private sector banks and some financial institutions have also entered the home loan market, by extending competitive and low interest rates.

For the benefit of our readers, we give below certain factors, which can be considered, before finalizing a housing loan.

  • Check the EMI applicable on the home loan and the eligibility factors accompanying it.
  • Check the property approval status with reference to valid documents
  • Decide on the type of home loan interest rate offers
  • Compare the housing loan interest rates offered by short listed banks
  • Finalize the bank which offers the lowest home loan interest rates after evaluating the bank on its history, credibility and performance.

Before deciding on a home loan, it is of acute importance to be careful enough and study the nature of the housing loan interest rates which are on offer. Basically, there are two types of interest rates i.e. fixed interest rates and floating interest rates. It is mandatory that you carefully choose between these two. Fixed home loan interest rates will remain fixed all over the tenure while floating home loan interest rate will keep on changing with the change in the base rate. However, the floating home loan interest rates are cheaper than the fixed home loan interest rates, in the first front.

There are multiple factors which can influence an applicant’s interest in going in for the best Home loan interest rate. Take a look at these factors;

  • Income: The most crucial factor which decides your home loan interest rates is you monthly income, the type of industry you work for and the stability of your employer. A stable and high income, sufficient enough to afford the loan will be rewarded with a pleasing interest rate.
  • Credit Score: Only the second to your income, your credibility factor plays a huge role. If you’re up to date with a good credit score, you’re likely to get a competitive housing loan interest

      rate. A good credit history also gives you the confidence to negotiate a good deal.

  • Location of the Property: The location and vicinity of the property can have a lasting influence on the housing loan you can expect.
  • Loan Amount: The proposed loan amount has the ability to influence the rate. The representatives are open to negotiate the rate if you’re willing to get a higher amount of loan.
  • Type of Loan: The home loan rates offered also depends on the types of home loan you’re availing. Standard loans such as home purchasing will come at standard rates while its counterparts like home improvement can be charged a higher rate.
  • Loan Tenure: The term opted for has a say when the bank decides the interest rate to be offered to you.
  • Type of Interest Rate: As mentioned a little earlier in this article, the housing loan interest rates on your home loan is dependent on the “Fixed” or the “Floating” rate you opt for. The fixed rate is slightly higher than its counterpart.
  • Employment Type: Salaried applicants are likely to get a slightly lower rate compared to the self-employed, owing to the risks involved.
  • On-going Promo Offers: The promotional offers floating around can get an applicant to think a bit deeper and then arrive at a decision.

 

Some of the leading banks and front runners who provide very affordable home loans are SBI, ICICI Bank, HDFC Bank, Axis Bank and LIC, amongst many others. However, it would be a good procedure to compare the Housing Loan rates, offered by different banks and choose the one providing the lowest home loan interest rates. To assist our readers further, we provide below the home loan interest rate comparison table.

 

Bank Name Home Loan Interest Rates in %
HDFC Bank 8.35 – 8.85
State Bank of India(SBI) 8.35 – 8.70
Bank of Baroda 8.30
Dena Bank 8.25
ICICI Bank 8.40 – 8.70
PNB Housing Finance 8.55 – 8.65
Tata Capital 8.75 – 8.85
Axis Bank 8.35 – 11.75
India Bulls Home Loan 8.40 – 10.05

 

Almost all the banks now provide an access to an online home loan interest rate calculator which is a very useful tool to get an instant idea on what could be the interest you would be paying on the sanctioned home loan amount. Applicants can visit the official websites of the banks which offer home loans and arrive at a decision after comparing the home loan interest rates.

 

To apply for a housing loan, applicants can either visit the lending banks or institutions of their choice after making a thorough comparative study or visit the respective bank’s website, to apply online.

 

Home Loan Interest Rates – Frequently Asked Questions

Questions Answers
  • How can I apply for a home loan?
  • You can apply for loan either by directly visiting the bank branch and meet the sales person or apply online 
  • What is the minimum and maximum tenure for house loans?
  • The minimum and maximum tenure for home loans range from 5-30 years.
  • Do I get tax benefits for the interest paid on home loans?
  • Yes, you can claim deduction for the interest charges paid on your home loan under Section 24 of the Income Tax Act
  • What is the minimum CIBIL rated credit score desirable to avail a home loan?
  • Any credit score above 650 is preferable to have a good chance to avail a home loan.
  • Do banks charge if I have to switch over from fixed rate to floating rate home loans and vice-versa?
  • Yes, there will be a fee derived on the basis of a percentage of the outstanding loan amount in the account, subject to a minimum amount.