Home Loan Interest Rates
In India, home loan interest rates start from 6.65% p.a. Borrowers meeting all the home loan eligibility conditions are offered the home loan at the lowest rate of interest. Lower the home loan interest rate, lower is the home loan EMI and the overall cost of the loan. Fixed and floating interest rate options further add to the convenience.
Current Home Loan Interest Rates 2022
| Interest Rate | Starting @ 6.65% |
|---|---|
| Processing Fee | Up to 0.25% |
| Loan Tenure | 5 to 30 years |
| Lowest EMI Per Lakh | Rs. 642 for 30 years |
| Prepayment Charges | Nil |
- Home loan interest rates can be floating or fixed in nature.
- Interest rates remain unchanged throughout the tenure for fixed interest rate home loans.
- Interest rates fluctuate depending on the RBI or bank’s policies, and other external factors for floating interest rate based home loans.
- Interest rates on home loans can be linked to Repo Rate or MCLR (Marginal Cost of Funds Based Lending Rate).
- The interest rates for home loans have become highly affordable in the last couple of years.
Lowest interest rate on Home Loan
Currently, Citibank Home Loan and Kotak Mahindra Bank Home Loan are available at the lowest interest rate starting at 6.65% p.a. Other leading banks offering low home loan rates are SBI, HDFC, and ICICI. As current housing loan interest rate are at decadal low, you can seal the best housing finance deal ever this year from a lender of your choice.
Types of Home Loan Interest Rates Available
A home loan can be availed of as a fixed rate loan or a floating/ variable rate variant. However, currently maximum lenders in India are offering floating home loan schemes only.
Fixed interest rate - As the name suggests, fixed interest rate of home loan results in fixed EMIs through the tenure. You can plan the budget for the entire tenure of the loan and thus there is no fear of escalating EMIs ever. However, this peace of mind comes at a higher cost than the floating rate interest. There is also a charge on foreclosure or prepayment of a fixed home loan.
Floating/ variable Home Loan - In this, interest rate changes as per fluctuations in benchmark lending rates. With change in any of the external benchmarks such as Treasury Bill yields or repo rates, your bank will also change your home interest rates and thus your EMI will adjust accordingly. However variable rate of interest is lower than fixed interest and there are no foreclosure or prepayment charges.
Some banks also offer combination schemes wherein the loan switches to a floating rate after initial few years. Based on your current repayment capacity and market situation choose the loan regime.