| Bank | Starting Interest Rate (p.a.) | Processing Fees |
|--------------------------------|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Kotak Mahindra Bank | 8.75% onwards | Salaried: 0.5% + taxes; Self-Employed/Commercial: 1% + taxes |
| Union Bank of India | 8.35% onwards | 0.50% of the loan amount |
| Bank of Baroda | 8.40% onwards | No processing fee; discounted upfront fee |
| Central Bank of India | 8.50% onwards | 0.50% (max20,000 + GST, waived till 31 March 2024) |
| Bank of India | 8.40% onwards | Nil |
| State Bank of India | 8.50% onwards | 0.35% of loan amount + GST |
| HDFC Home Loans | 8.75% onwards | Up to 0.50% or3,000 + taxes, whichever is higher |
| LIC Housing Finance | 8.50% onwards |15,000-?50,000 + GST, based on loan amount |
| Axis Bank | 8.75% onwards | Up to 1% or min10,000 + GST |
| Canara Bank | 8.40% onwards | 0.50% of loan amount |
| Punjab & Sind Bank | 8.50% onwards | 0.15%-0.25% of loan amount; max15,000 for loans above50 lakh |
| IDFC First Bank | 8.85% onwards | Up to 3% of loan amount |
| Bank of Maharashtra | 8.35% onwards | No processing fees |
| Punjab National Bank | 8.40% onwards | Nil |
| IDBI Bank | 8.50% onwards | 0.50% (?2,500-?5,000) |
| HSBC Bank | 8.50% onwards | 1% of loan amount or10,000, whichever is higher |
| Karur Vysya Bank | 9.00% onwards |2,500-?7,500 + GST based on loan amount |
| Saraswat Bank | 8.70% onwards | No fee up to35 lakh; 0.30%-0.50% for higher amounts |
| Jammu & Kashmir Bank | 8.75% onwards | 0.50% + GST (min2,000, max50,000) |
| South Indian Bank | 8.50% onwards | 0.50% of loan amount + GST |
| Federal Bank | 8.80% onwards | 0.50% (?10,000-?20,000) |
| Standard Chartered Bank | 8.95% onwards | Contact the bank |
| Karnataka Bank | 8.85% onwards | Contact the bank |
| Sundaram Home Finance | Contact the bank | Up to 0.75% of loan amount + GST |
| Dhanlaxmi Bank | 9.35% onwards | 1% of loan amount (min10,000 + GST) |
| Tata Capital | 8.75% onwards | 2% + GST |
| Tamilnad Mercantile Bank | 8.60% onwards | 0.50% of loan amount + GST |
| Bandhan Bank | 9.16% onwards | Contact the bank |
| Yes Bank | 9.00% onwards | 1.5% of loan amount or10,000, whichever is higher + GST |
| GIC Housing Finance | 8.80% onwards |2,500 + GST |
| Shriram Housing | 9.50% onwards | Up to 2.5% of loan amount + taxes |
| India Shelter Finance | 12% onwards | Contact the institute |

Types of Home Loan Interest Rates

• Fixed Interest Rate:
• The rate remains constant throughout the tenure.
• Shielded from market fluctuations.

• Typically higher than floating rates initially.

• Floating Interest Rate:

• Varies based on market rates and benchmarks (like Repo Linked Lending Rate - RLLR).
• Offers potential savings when rates drop but risks higher EMIs if rates rise.

Tips for Securing Lower Interest Rates

• Maintain a good credit score (750+ preferred).
• Opt for a shorter tenure to reduce interest costs.
• Consider a joint loan to increase eligibility and lower rates.
• Research and compare lenders using tools like home loan EMI calculators.

Types of Home Loan Interest Rates

1. Fixed Interest Rate

• Definition: The interest rate remains constant throughout the loan tenure.
• Advantages:
• Predictable EMIs provide financial stability.
• Shields borrowers from market fluctuations.
• Suitable if lending rates are expected to rise.
• Disadvantages:
• No benefit from falling market rates.
• Typically higher than floating interest rates at the start.

2. Floating Interest Rate

• Definition: The interest rate fluctuates based on the bank’s lending rate, influenced by repo rate and other market factors.
• Advantages:
• Beneficial when market rates drop, reducing interest costs.
• Often starts lower than fixed rates.
• Disadvantages:
• Risk of increased EMIs if lending rates rise.
• Less predictable and may strain budgets during rate hikes.

Steps to Apply for a Home Loan

• Complete the Application Form

• Provide personal details, income information, employment history, property details, and estimated cost.

• Verification and Processing

• Bank checks submitted documents and credit score. Discrepancies may lead to rejection.

• Loan Sanction

• On successful verification, the loan is sanctioned within 1-2 days. In-person verification may be required.

• Technical and Legal Check

• Bank evaluates the property’s legal ownership, quality, and construction progress.

• Payment of Processing Fee

• Typically 0.25%-0.50% of the loan amount.

• Loan Disbursement

• After eligibility verification, funds are transferred to the borrower’s account with an EMI schedule provided.

Key Factors Influencing Home Loan Interest Rates

• Credit Score

• A score of 750+ improves eligibility and can secure lower rates.

• Income and Employment

• Stable, high-paying jobs in reputed organizations are favored by lenders.

• Loan Amount

• Smaller loans (up to30 lakh) usually have lower rates.

• Type of Loan

• Regular home loans typically have standard rates, while specialized loans like NRI or plot loans may have higher rates.

• Concessions for Women Borrowers

• Women often receive a discount of about 0.05% on interest rates.

• Type of Interest Rate

• Fixed rates ensure consistent EMIs, while floating rates fluctuate with market conditions.

FAQs on Home Loan Interest Rates

• How can I get the lowest home loan rates?

• Compare rates, maintain a high credit score, and opt for shorter tenures.

• What is the home loan interest rate?

• The percentage charged by lenders on the loan principal, determining EMI amounts.

• How can I reduce home loan interest?

• Make higher down payments, choose shorter tenure loans, and improve credit scores.

• What is the Loan-to-Value (LTV) Ratio?

• The percentage of the property cost financed by the bank. Higher LTVs may result in higher rates.

• Can I switch from fixed to floating rates?

• Yes, usually with a conversion fee (~0.5% of the principal).

• How can I check the total interest payout?

• Use an EMI calculator to estimate interest and repayment breakdown.

• How often do interest rates change for floating loans?

• Rates reset at least once every three months, based on RBI policies.

• Can credit risk premiums change during the loan tenure?

• Yes, if there are significant changes in the borrower’s creditworthiness.

Understanding the nuances of fixed and floating rates can help borrowers make informed decisions and manage their home loan efficiently.

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