2020 Home Loan Interest Rates of All Banks

In India, banks and housing loan lenders can charge an interest rate from anywhere between 6.70% to 12.00% per annum. Each lender offers different home loan interest rates based on your eligibility and their own criteria. This guide compares the top banks in India to help you understand their interest rates, benchmark types and processing fees before choosing a housing loan.

Current Home Loan Interest Rates of All Banks

We've researched the top banks and lenders in India that provide home loans for new buyers and seasoned property builders alike. Below, you can compare the minimum home loan interest rate, benchmark type and processing fees of over 30 banks.

Minimum Interest RateBenchmark TypeProcessing Fees
State Bank of India (SBI)6.95%RLLR0.40%. Min: Rs. 10000. Max: Rs 30000.
HDFC Bank6.95%RLPRUp to 1.50%. Max: Rs. 4500.
ICICI Bank6.95%RLLR0.50% to 2.00%. Max: Rs. 1500. Max for Delhi, Mumbai, Bangalore: Rs. 2000.
Axis Bank7.75%RLLR, MCLRUp to 1.00%. Min: Rs. 10,000 with Rs. 5000 up front.
LIC Housing Finance6.90%PLRMin: Rs. 10000. Max: Rs. 15000.
PNB Housing8.60%PLR1.00%.
Punjab National Bank (PNB)7.15%MCLR, RLLR0.35%. Min: Rs. 2500. Max: Rs. 15,000. Waiver on fees during Festival Bonanza Period from 07.09.20 to 31.12.20.
Bank of Baroda (BOB) (merged with Vijaya Bank)7.00%MCLR, RLLRUp to 0.50%. Min: Rs. 8500 rs. Max: Rs. 25000.
IDBI Bank7.40%RLLRMin: Rs. 2500. Max: Rs. 15000.
Canara Bank (Merged with Syndicate Bank)6.90%RLLR0.50%. Min: Rs. 1500. Max: Rs.10000.
Bank of India (BOI)6.85%RLLR, MCLR0.25%. Min: Rs. 1500. Max: Rs. 20000.
DHFL8.75%Up to 1.00%. Max: Rs. 2500.
Indian Bank (merged with Allahabad Bank)7.15%RLLRAs communicated by corporate office from time to time.
Bajaj Finserv (based on fixed rates)9.05%, 7.50% promotionPLR Up to 1.20%.
Union Bank of India (merged with Andhra Bank and Corporation Bank)6.70%RLLR0.50%. Max: Rs. 15000.
UCO Bank7.10%RLLR0.50%. Min: Rs.1500. Max: Rs. 15000.
Central Bank of India6.85%RLLR0.50%. Max: Rs. 20000.
Yes Bank8.95%MCLR1.00%. Max: Rs. 10000.
Bank of Maharashtra7.05%RLLR, MCLR0.25%. Max: Rs. 25000.
IIFL8.75%PLRUp to 1.25%.
Kotak Mahindra Bank7.20%RLLRUp to 2.00%.
Federal Bank7.90%RLLR-
IDFC First Bank7.00%RLLRMax: Rs.10000.
Indiabulls8.99%PLRUp to 2.0%.
Indian Overseas Bank7.05%RLLR0.50%. Max: Rs. 25000
Punjab & Sind Bank (PSB)6.90%RLLRFull waiver of processing charges during festival.
Standard Chartered Bank7.99%MCLRUp to 1.00%.
Tata Capital8.50%PLR0.50%.

Minimum interest rates listed are based on floating rates, unless stated otherwise.

Here, you can see the lowest interest rates offered on the most basic home loan you can avail from a lender. In addition, you can review the benchmark type of each lender to understand how your effective interest rate is calculated.

Finally, each bank has different processing fees to be paid in addition to your interest rate. These are one-time charges + GST that you will have to pay upfront, unless stated otherwise by your lender. They are calculated as a percentage of your loan amount.

Types of Home Loan Interest Rates

Your home loan interest rate is a percentage of your home loan that you pay in addition to the principal loan amount. Your equated monthly installment or EMI will be calculated based on which home loan interest rate type you choose: a floating rate or a fixed rate.

Floating Interest Rate

Floating interest rates are also called variable interest rates by some banks. They are not fixed and are linked to a reference rate, also known as a benchmark rate.

Floating interest rates change as the reference rate changes. This means your home loan EMI can increase or decrease over time and with no warning.

In the case that reference rates are low, you can expect to pay a lower interest rate in your EMI. On the other hand, if reference rates are high, you will pay a higher interest rate in your EMI.

Fixed Interest Rate

Fixed interest rates on your home loan remain the same throughout the loan tenure. This means your EMI will be constant throughout the loan term, making it easier to plan your EMI payments ahead of time.

Even if the reference rate of your lender is low, you will pay the same fixed interest rate on your home loan. Fixed interest rates are generally higher than floating interest rates to account for this.

Most lenders allow you to switch from a fixed interest rate to a floating interest rate after a certain amount of time.

Factors That Affect Home Loan Interest Rates

Your home loan interest rate depends on a number of criteria including personal factors like your credit score, type of employment and gender. Additionally, your interest rate is determined by the type of home loan you choose, as well as the reference rate that your bank uses.

CIBIL or Credit score

Your credit score is the most important factor in determining your home loan interest rate.

A high CIBIL credit score shows banks that you have a good repayment history, thus you will be charged a lower interest rate on your home loan. With a low credit score, you are still eligible for a home loan but you will be charged a higher rate of interest.

Read more: Home Loan Eligibility: Compare Eligibility Criteria By Bank

Type of employment

Your home loan interest rate also depends on your employment type. Salaried employees are charged lower home loan interest rates because they have a fixed income, while self-employed individuals are charged higher interest rates because their income is subject to more risk.

See below to compare 10 banks that offer the lowest home loan interest rates for salaried and non-salaried people.

Based on our research, Union Bank of India, Bank of India and LIC Housing Finance offer the lowest home loan interest rates for salaried employees.

Minimum Interest RateMaximum Interest RateProcessing Fees
Union Bank of India (merged with Andhra Bank and Corporation Bank)6.70%7.15%0.50%. Max: Rs. 15000.
Bank of India (BOI)6.85%7.15%0.25%. Min: Rs. 1500. Max: Rs. 20000.
LIC Housing Finance6.90%-Min: Rs. 10000. Max: Rs. 15000.
Canara Bank (merged with Syndicate Bank)6.90%8.90%0.50%. Min: Rs. 1500. Max: Rs. 10000.
Punjab & Sind Bank (PSB)6.90%7.25%Full waiver of processing charges during festival.
State Bank of India (SBI)6.95%7.35%0.40%. Min: Rs. 10000. Max: Rs 30000.
HDFC Bank6.95%7.85%Up to 0.50%. Maximum: Rs. 3000.
ICICI Bank6.95%7.95%0.50% to 2.00%. Max: Rs. 1500. Max for Delhi, Mumbai, Bangalore: Rs. 2000.
Bank of Baroda (BOB) (merged with Vijaya Bank)7.00%8.35%Up to 0.50%. Min: Rs. 8500 rs. Max: Rs. 25000.
IDFC First Bank7.00%11.00%Max: Rs. 10000.
Interest rates listed are based on floating rates, unless stated otherwise.

For self-employed professionals and non-professionals, Bank of India, Union Bank of India and Central Bank of India offer the lowest home loan interest rates.

Minimum Interest RateMaximum Interest RateProcessing Fees
Bank of India (BOI)6.85%7.75%0.25%. Min: Rs. 1500. Max: Rs. 20000.
Union Bank of India (merged with Andhra Bank and Corporation Bank)6.85%7.15%0.50%. Max: Rs. 15,000.
Central Bank of India6.85%7.10%0.50%. Max: Rs. 20000.
LIC Housing Finance6.90%-Min: Rs. 10000. Max: Rs. 15000.
Canara Bank (merged with Syndicate Bank)6.90%8.90%0.50%. Min: Rs. 1500. Max: Rs.10000.
Punjab & Sind Bank (PSB)6.90%-Full waiver of processing charges during festival.
Bank of Baroda (BOB) (merged with Vijaya Bank)7.00%8.35%Up to 0.50%. Min: Rs. 8500 rs. Max: Rs. 25000.
IDFC First Bank7.00%11.00%Max: Rs. 10000.
Bank of Maharashtra7.05%-0.25%. Max: Rs. 25000.
Indian Overseas Bank7.05%7.30%0.50%. Max: Rs. 25000
Interest rates listed are based on floating rates, unless stated otherwise.

Gender

If you are a woman, you may be able to benefit from lower interest rate deals. For example, women can avail a 0.50% concessional interest rate on their home loan from a majority of lenders.

Like most banks, SBI promotes a minimum 6.95% p.a. interest rate that applies to women only. For other borrowers, the minimum rate is 7.00% p.a.

Read more: State Bank of India (SBI) Home Loan Review: Should You Consider SBI?

Loan Amount

Home loan interest rates are influenced by the loan amount you are seeking to borrow.

Your Loan to Value ratio, known as the LTV ratio, represents the percentage of your property value that the lender can finance through a home loan. Generally, a lower LTV ratio results in a lower home loan interest rate.

Loan slabs up to 30 lakhs will have lower interest rates than loan slabs between 30 lakhs and 75 lakhs. Loan slabs above 75 lakhs will have the highest interest rates on the home loan.

Home Loan Type

Interest rates vary depending on the type of home loan you are seeking or are eligible for.

  • Different types of home loans charge different interest rates. Home purchase loans have the lowest interest rates, while other loans for home improvement or renovation have higher rates of interest.
  • Some lenders offer specific home loans for a type of customer. Non-Resident Indians, for example, can find NRI home loans with interest rates best suited for them. While loan schemes like this are offered by lenders to help different types of people buy a home, they may carry higher interest rates than normal to account for risk.
  • Sometimes, lenders have promotions with lower home loan interest rates in order to attract more customers. You will have to meet the terms and conditions, but you may be able to avail a better home loan deal if you apply for a home loan during a promotion.

Reference Rate

A reference rate is a benchmark that banks use to determine the effective interest rate on your home loan. Your bank will most likely offer a home loan interest rate linked to an external benchmark, as directed by the Reserve Bank of India. However, some lenders still calculate interest rates based on an internal benchmark, in which they determine their own interest rate benchmark.

Whether your lender uses an internal or external benchmark, you can expect your floating home loan interest rate to change if there is a change in the reference rate. Here are some of the reference rates you may encounter when choosing your home loan:

  • Prime Lending Rate (PLR or BPLR): Initially, banks and lenders calculated interest through PLR. Now, only non-bank housing finance companies like LIC Housing determine interest rates on new home loans through this internal benchmark.
  • Base Rate: In 2010, this internal benchmark was introduced to replace PLR.
  • Marginal Cost Lending Rate (MCLR): MCLR was introduced to replace the base rate system in 2016. Many banks still offer home loan on this internal benchmark.
  • Repo Linked Lending Rate (RLLR): In 2019, RBI set a minimum interest rate called the repo rate. All major banks must link to this external benchmark and are allowed to add a margin. It's important to note that many banks will refer to this same calculation as Repo Based Lending Rate (RBLR) and External Benchmark Lending Rate (EBLR).

While banks and home loan lenders show these different rates on their website, new home loan borrowers only have the option between RLLR and MCLR. RLLR is the best option, as it is generally lower than MCLR options. It's important to note that there are other certified external benchmarks that your interest rate could be linked to, as well.

How Is Home Loan Interest Rate Calculated

Many banks and loan lenders offer an interest rate calculator to estimate the interest you will pay in your EMIs. Here, you can see how your effective interest rate is calculated.


Effective Interest Rate (EIR) = Base Rate + Markup


Your home loan interest rate is calculated on a base rate and markup.

The base rate represents the external benchmark that your home loan interest rate is linked to, or an internal benchmark decided by your lender. The markup, also known as a spread, is the margin added to your base rate by your lender. Your home loan lender is allowed to increase your home loan interest rate by adding this margin to the base rate.

How To Get The Lowest Home Loan Interest Rate?

While some lenders offer lower home loan interest rates regardless of your eligibility, it's important to apply with the best qualifications so that you can avail the best home loan rate. Consider doing the following if you seek to get the lowest interest rate on your home loan:

  • Increase and maintain a good credit score. You should always aim for a CIBIL score of 900. With a high credit score, you will be charged a lower interest rate on your home loan.
  • Apply for a home loan with a co-owner or co-applicant. Joint home loans consider the credit history of both parties, thus you are eligible for a lower home loan interest rate if your co-owner or co-applicant has a good credit score.
  • Increase your home loan down payment. Higher loan amounts mean higher interest rates, so you can reduce your home loan interest rate by paying more upfront. Down payments also signal to your home lender that you are credible.
  • Avail a home loan balance transfer. If you have already secured a home loan, but your interest rate is too high, you can transfer your home loan balance to another lender with a lower home loan interest rate.
Natalia Sanchez-Kumar

Natalia Sanchez-Kumar is a Junior Research Analyst at ValueChampion, specialising in home loans in India. She is a History graduate of New York University and has worked in the area of social impact, Future of Work and socio-technological research in the US and India. She has co-authored policy proposals alongside the International Labour Organisation in Sri Lanka and the Maldives, as well as hosted a data privacy conference with Facebook in New Delhi.