Understanding Which Bank Is Best For Home Loan With Low Interest in India

Are you looking for the answer to “Which bank is best for home loan with low interest in India?” Then you are at the right place. Our comprehensive guide provides in-depth information on home loans in India, including factors to consider, and tips for lowering interest rates. It also educates how to calculate interest on a home loan, allowing them to make informed decisions about their home loan needs.

What is a Home Loan Interest Rate?

The home loan interest rate is a percentage of the principal amount a lender charges borrowers. This rate determines the loan’s cost and is usually linked to repo rates, which vary by lender. Several factors influence home loan interest rates, including the applicant’s credit score, loan amount, and tenure. Before applying for a home loan, applicants should compare current interest rates from various lenders.

How to Calculate Interest on a Home Loan?

Use an EMI calculator or formula to calculate your total interest liability for a home loan.

The formula for EMI for home loans: EMI = [P x r x (1+r)^n]/[(1+r)^n-1]

P= Principal Amount

r= Rate of interest

n= No. of years

Top 10 Best Banks For Home Loan with Low Interest in India

1. HDFC Bank

In the dilemma of deciding which bank is best for home loan with low interest, HDFC Bank offers the best home loans with interest rates ranging from 8.60% to 9.15%, processing fees up to 0.55% and applicable tax, tenures up to 30 years and loan amounts of up to Rs. 10.5 Crore.

Types of HDFC Home Loans

• HDFC Housing Loan: This loan is suitable for individuals planning to purchase or construct a new home.
• Rural Housing Loans: The loan is for agriculturists, dairy farmers, planters, and horticulturists who want to buy new or existing residential properties in rural and urban areas, as well as construct or renovate their homes.
• Home Renovation Loan: The loan is for people who want to improve their homes by tiling, flooring, painting and plastering.
• Home Extension Loan: This home loan is for homeowners looking for financing to expand their existing homes.
• Top-up Home Loan: This home loan is available to HDFC customers who need additional funds for personal or business expenses and property construction.
• Home Loan Balance Transfer: Borrowers can transfer their existing home loans from other banks and HFCs to HDFC Bank at a lower interest rate.

2. Bank of Baroda

Bank of Baroda provides home loans up to Rs. 21 Crore, with interest rates ranging from 8.45% to 10.65% and processing fees of Rs. 8,500 GST. The loan tenure can be up to 30 years.

Types of Bank of Baroda Home Loans

• Baroda Housing Loan: The bank offers a home loan scheme for purchasing plots, flats, and houses, building new homes, and extending existing ones.
• Baroda Home Loan Takeover Scheme: Borrowers can lower their home loan interest cost by transferring their outstanding loan to Bank of Baroda at lower rates.
• Home Improvement Loan: This home loan program covers home repairs and renovation expenses, including furnishings and fittings such as fans, air conditioners and water filters.
• Baroda Pre-Approved Home Loan: This home loan facility has a 4-month validity period and allows eligible applicants to receive approval before identifying a house, flat, or plot.
• Baroda Top-up Loan: This is an additional loan option for existing home loan borrowers, including NRIs and PIOs, for non-speculative purposes.
• Pradhan Mantri Awas Yojna: PMAY provides home loans to customers in economically weaker sections, low-income groups, and middle-income groups, with interest subsidies of up to Rs. 2.68 Lakh for affordable property purchases.

3. ICICI Bank

ICICI Bank provides home loans for up to 30 years and loan amounts up to Rs. 11 Crore. Interest rates range between 9.10% and 10.15%, with processing fees ranging from 0.51% to 2.10% of the loan amount plus applicable taxes.

Types of ICICI Bank Home Loans

• ICICI Housing Loan: This home loan is to purchase or construct a residential unit.
• Instant Home Loan: ICICI Bank offers a pre-approved home loan with instant approval for those with salary accounts.
• Express Home Loans: This home loan provides borrowers with a fast-track digital application process.
• Extra Home Loan: The home loan scheme provides a 20% increase in the loan amount and repayment period for applicants aged up to 67, backed by a mortgage guarantee, which improves repayment capacity.
• Pre-approved (Instant) Balance Transfer: ICICI Bank provides a pre-approved instant home loan balance transfer facility for existing customers who want to transfer their existing home loans from other banks or HFCs at lower interest rates.
• Balance Transfer and Top-up: This home loan enables the transfer of existing loans from other banks or NBFCs to ICICI Bank at lower interest rates, providing additional funding options for professional or personal needs.
• Pratham Home Loans: This home loan scheme is accessible to salaried and self-employed individuals with a monthly salary of at least Rs. 10,500 and a business history of at least 5 years for affordable housing properties.
• Land Loan: This home loan is designed for people who need money to purchase a plot of land.
• NRI Home Loan: This home loan product is intended for non-residential (NRI) applicants who want to buy or build a home in India.
• Insta Home Loan Overdraft: This is a pre-approved digital home loan overdraft facility that offers immediate funds for personal expenses such as education, home renovation, debt consolidation, and other emergencies.
• Insta Top-up Loan: This pre-approved top-up loan enables qualified applicants to fund their personal and business needs with just three clicks.

4. SBI Bank

SBI offers home loans with interest rates between 8.45% and 10.15%, processing fees of 0.40% + GST.

Types of SBI Bank Home Loans

• SBI Home Loan: This home loan scheme is intended to purchase ready-to-move, under-construction, or resale residential properties and for constructing, repairing, renovating, and extending existing properties.
• SBI Home Loan Balance Transfer: The State Bank of India provides a balance transfer facility for home loan borrowers to switch their existing loans to a lower interest rate.
• NRI Home Loan: The NRI home loan scheme allows Non-Resident Indians to purchase or construct a house in India.
• Flexipay Home Loan: The home loan allows salaried applicants to pay lower initial EMIs and higher subsequent EMIs and allows them to repay only the interest component during the moratorium period.
• Privilege Home Loan: This home loan product is tailored for employees of the central and state governments, public sector banks and other pensionable service applicants.
• Shaurya Home Loan: The home loan scheme is specifically for army and defence personnel, with lower interest rates and a long repayment period.
• Pre-approved Home Loan: The facility offers applicants pre-approved loan sanctions, allowing them to confidently negotiate with builders and sellers before finalising the property.
• Realty Home Loan: This home loan program is granted to purchase a plot of land to build a house.
• Top-up Home Loan: The SBI home loan scheme offers existing borrowers an additional loan amount for non-speculative purposes.
• YONO Insta Home Top-up Loan: SBI provides a pre-approved top-up home loan facility to pre-selected existing borrowers, with instant access through the SBI YONO app.
• Home Loan to Non-Salaried- Differential Offerings: A unique home loan program implemented to meet the housing financing needs of non-salaried applicants.
• SBI Tribal Plus: This home loan scheme is for people living in tribal or hilly areas.

5. Kotak Bank

Kotak Mahindra Bank provides home loans with an 8.75% interest rate and a processing fee of 0.55% for terms of up to 30 years and loan amounts of up to Rs. 11 Crore.

Types of Kotak Bank Home Loans

• Kotak Housing Loan: This loan is for individuals who want to purchase, build, or renovate their home.
• Home Loan Balance Transfer: Kotak Mahindra Bank’s home loan facility allows customers to transfer existing home loans from other financial institutions at lower interest rates.
• Home Improvement Loan: The bank provides a home loan to renovate or improve an existing home.
• NRI Home Loan: This home loan scheme provides housing finance for non-resident Indians (NRIs).
• NRI Home Improvement Loan: This home loan is for Non-Resident Indians (NRIs) who require funds to cover renovation or improvement expenses related to their home.

6. Punjab National Bank

Punjab National Bank offers home loans at an interest rate of 8.55%. Processing fees are up to 0.55% of the loan amount plus GST; loan terms can be up to 30 years.

Types of Punjab National Bank Home Loans

• Housing Loan for Public: This housing loan program is available for the purchase of a home, as well as the improvement, repair, renovation, modification, or furnishing of an existing property.
• PNB Max Saver: This home loan overdraft facility can be used for various purposes under the housing financing scheme, except for land or plot purchases.
• PNB Pride Housing Loan for Government Employees: These home loans are available to permanent employees of the state, central government, defence personnel and paramilitary.
• PNB Gen-Next Housing Finance Scheme for Public: The home loan scheme is intended for the next generation of salaried borrowers, including PSB/PSU/government sector employees and IT professionals up to the age of 40.

7. Union Bank of India

Union Bank of India offers home loans with an interest rate of 8.40%, processing fees of 0.55% of the loan amount (maximum Rs. 15,500), and GST. Additionally, the bank offers a home loan benefit to women.

Types of Union Bank of India Home Loans

• Union Home Loan: The bank offers a home loan with a balance transfer option for purchasing a plot, renovating or extending an existing home.
• Union Awas: This home loan scheme is intended for customers in rural or semi-urban areas who want to buy or build a home and those who need to repair or extend their existing homes.
• Union Home-Smart Save: This home loan facility links the borrower’s home loan account to an overdraft account, either a savings or current bank account. Borrowers can repay their loans by depositing or withdrawing funds at any time, saving on interest costs.
• Pradhan Mantri Awas Yojna (PMAY): This home loan scheme is for the economically weaker, lower and middle-income groups.
• Union Ashiyana Personal Loan Scheme: This home loan scheme aims to cover personal expenses for existing and new home loan borrowers.
• Union Ashiyana Overdraft Scheme: This overdraft program allows home loan borrowers to meet personal or business needs and pay off high-cost loans.

8. IDFC First Bank

IDFC First Bank offers home loans with interest rates starting at 8.80%, processing fees up to 3.10%, and loan terms up to 30 years.

Types of IDFC First Bank Home Loans

• IDFC First Housing Loan: This home loan is intended for individuals who want to buy, build, or renovate their existing homes.
• IDFC First Suvidha Shakti: The micro-housing loan scheme helps women pay for home improvements like sanitation, water connection and renovation.
• IDFC FASTRACK Home Loan Balance Transfer: IDFC First Bank provides a balance transfer facility for existing home loan borrowers, allowing them to save money on interest by transferring outstanding balances at lower rates. It also provides top-up home loans for additional funds.

9. Bajaj Housing Finance Home Loan

Bajaj Housing Finance offers home loan rates ranging between 8.55% and 15.10%, processing fees up to 7.15% for 30-year terms and loan amounts up to 90% of the property value.

Types of Bajaj Housing Finance Home Loan

• Bajaj Housing Finance Home Loan: The home loan program allows individuals to purchase, construct, repair, renovate and extend a house.
• Home Loan for Doctors: The doctor-specific home loan scheme provides tailored assistance when purchasing a new home or refinancing existing loans at lower interest rates.
• Top-up Loan: This loan facility allows individuals to borrow additional funds from their existing home loans and use the proceeds for non-speculative purposes through home loan balance transfers.
• Home Loan Balance Transfer: Bajaj Housing Finance provides a loan facility to existing home loan borrowers from other banks or HFCs, allowing them to transfer their loans at lower interest rates.

10. Federal Bank

The Federal Bank provides up to Rs. 16 Crore home loans at low interest rates, starting at 8.90%. The processing fee is 0.55% of the loan amount, and terms of up to 30 years are available.

Types of Federal Bank Home Loans

• Federal Housing Loan: Customers can use this home loan for various purposes, including purchasing, constructing, repairing, renovating and extending residential properties, as well as repaying debt for long-term company employees.
• Plot Purchase Loan: This home loan is intended to purchase a residential property on the plot.

Conclusion

What is a home loan interest rate?

A home loan interest rate, often referred to simply as “mortgage interest rate,” is the percentage charged by a lender for borrowing money to purchase a home or property.

How to calculate interest on a home loan?

To calculate a home loan’s total interest liability, use an EMI calculator or formula:

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

Which bank is best for home loan with low interest?

Top 10 best banks for home loan with low interest in India:

• HDFC Bank
• Bank of Baroda
• ICICI Bank
• SBI Bank
• Kotak Bank
• Punjab National Bank
• Union Bank of India
• IDFC First Bank
• Bajaj Housing Finance Home Loan
• Federal Bank