Found your dream home? That’s great. But it’s just one of the steps in the process. The next most important step is to find the right home loan at the lowest interest rate.
Home loan Interest rate can significantly affect your overall home purchase cost. That’s why you must always check and compare home loan interest rates offered of all banks and financial institutions in the market.
Lenders determine the home loan rate after considering various factors such as your credit score, income, loan amount, tenure, etc. In addition to interest rate, lenders also charge various other fees and charges, including processing fee, legal charges, technical fees, CERSAI charges, among others. You must compare these charges too before you sign the deal.
Rate of Interest*(Starting from)
|Bank of Baroda Home Loan||6.90% p.a.||Rs. 659|
|SBI Home Loan||6.70% p.a.||Rs. 662|
|HDFC Ltd Home Loan||6.95% p.a.||Rs. 662|
|Sundaram HFL Home Loan||7.75% p.a.||Rs. 716|
|Union Bank of India||6.90% p.a.||Rs. 659|
|L&T HFL Home Loan||8.40% p.a.||Rs. 762|
|PNB HFL Loan||8.45% p.a.||Rs. 765|
|Cholamandalam HFL||10% p.a.||Rs. 878|
|Magma Housing Finance Home Loan||11.50% p.a.||Rs. 990|
|Indian Bank Home Loan||6.85% p.a.||Rs. 655|
|ICICI Bank Home Loan||6.90% p.a.||Rs. 659|
|Bajaj HFL Home Loan||7.0% p.a.||Rs. 665|
The interest rates mentioned above are subject to change at any time without prior notice.
#The loan tenure is assumed as 30 years for calculating EMI per lakh.
This depends on the type of interest rate applicable on your home loan. There are types of home loan interest rates in India:
Fixed Interest Rate: This type of interest rate does not change throughout the loan tenure. Since the interest rate remains unchanged, your home loan EMI also doesn’t change. You could choose a fixed interest rate loan if you expect the interest rates to increase in the future. On the other hand, if you expect interest rates to go down in the future, it’s better to avoid fixed rate loans.
Floating Interest Rate: Floating interest rates keep changing as per the market lending rates. Thus, EMI on floating rate loans also changes as and when interest rates fluctuate. Floating rates are preferred when you expect the interest rates to go down in the future.
What Factors affect Home Loan Interest Rates? <H2>
There are various factors that may affect the interest rate offered by banks to you. Take a look at some of the most important factors:
Credit Score: To be able to understand your credit-worthiness, banks always check your credit report. The report includes all your credit history as well as your credit score. If the score is good, you might get a better deal from the bank.
Income: Lenders analyze your income to know whether your job is stable or not. Stability in job and income indicates lower risk and, thus, helps you get a loan at a lower rate.
Property location: If the property is located in a good neighborhood, it’s easier to get a loan approved at lower interest rates.
Loan tenure: Longer the tenure you choose, lower will be the interest rate on your home loan.
Type of interest rate: Interest rates also vary depending on whether you are taking a Fixed Rate Loan or a Floating Rate Loan.
Gender-based concessions: There are some banks that offer special concessions in interest rates for women borrowers.
Even though home loan interest rates are not in any individual’s control, there are ways to ensure that you get the lowest home loan rates possible. Take a look:
Maintain a good credit score: A credit score of 800+ is generally considered excellent by the lenders. High score reflects your creditworthiness and your good credit behaviour. In case your credit score is not good enough, make sure to improve it before you apply for a home loan.
Compare offers from different lenders: Like you shop for everything else, make sure to check home loan offers from different banks and finance companies. Compare their offers and choose the one that offers the lowest home loan interest rate for your requirement.
Negotiate with the lender: If you have a good credit history with a good credit score and if you meet all the eligibility criteria, you can negotiate the terms of the loan with the lender.
Apply for a Balance Transfer Loan: If you already have a home loan and want to reduce your interest burden, you could consider taking the home loan balance transfer facility. This allows you to transfer your loan from one bank to another for taking advantage of lower rates.
Choose the right EMI calculation method: Banks calculate your EMI using two methods: Flat Rate method and Reducing Balance method. Under the first method, your interest outgo remains fixed throughout the tenure. However, under the reducing balance method, the interest is calculated based on your outstanding principal amount.
Interest rates vary across banks. The interest rate on home loan by Union Bank of India starts from just 6.40% p.a., whereas Bank of Baroda and Indian Bank are offering home loans from 6.50% p.a. SBH's home loan starts from 6.70% p.a.
At present, Indian Bank and Bank of Baroda are offering home loans at interest rates starting from 6.50% p.a. - which is among the lowest rates offered by banks and HFCs in India. If you are a women borrower, you can get even better rates.
Assuming a tenure of 30 years and rate of interest of 6.85% p.a., the EMI on a home loan of Rs 50 lakhs would be approximately Rs 32,763.
Yes, there are certain banks and finance companies that offer concessions on interest rates for women borrowers. For example: State Bank of India (SBI) offers a concession of 0.5% for women borrowers.
Yes, there are certain ways you can try to reduce your home loan interest. Take a look:
Disclaimer: The information available on this site has been gathered from publicly available sources and is accurate to the best of our knowledge. However, please be aware that the rates and other offers may vary based on your profile and may be subject to change without notice. Therefore, we advise you to verify the information before applying for any loan through this website. Magicbricks accepts no liability for any loss arising from the use of the information on this website. Refer T&C for the detail.
(T&C link: https://property.magicbricks.com/terms/terms.html)
**This service is available in select cities only.
*These calculators are only for illustrative purposes. These figures may or may not be applicable to your particular situation. Magicbricks will not be responsible for any loss or liability arising from the use of these calculators.