What is the Lowest Home Loan Interest Rate in India in Nov 2024?
A home loan is a significant burden compared to other consumer loans, and even slight variations in interest rates can have an enormous effect on the borrower's overall interest expenses. Before applying for a house loan, potential borrowers should evaluate the interest rates provided by as many lenders as they can. Many variables, including the applicant's credit score, loan size, duration, and others, influence the interest rates imposed on house loans. Before applying for a house loan, it is advised that the applicant review the current interest rates charged by various lenders. The borrower's overall interest rate is affected by a small variation in the rate of interest. In this article, we have covered the current interest rates on home loans provided by all Indian banks and how to compute them.
Table of Content
Types of Home Loan Interest Rates
In India, there are three different kinds of house loan interest rates. The first two, however, are the most common.
Fixed Interest Rate: This kind of interest rate guarantees the consistency of the amount due because it stays the same throughout the loan. The benefit is that interest payments are fixed upfront, protecting against changes in interest rates and potential financial difficulties in the case of a rate increase. The disadvantage is that there is no gain if regular loan interest rates are reduced because the frozen interest component still exists.
Fluctuating Interest Rates: In this case, the current interest rates provided by the bank impact the interest rate on your house loan. Interest rate changes, bank responses, and the RBI's monetary policy are some variables that affect this kind of interest rate. You may gain from the most recent rates by choosing a floating rate; if it diminishes, you can obtain the lowest interest rate on your house loan. In rare instances, however, rate increases could result in additional fees for your loan.
Hybrid Loan Rates: Interest rates on hybrid home loans are a combination of variable and fixed. Before converting to a floating rate, they first have a set rate. It is ideal for people who want to prepay or foreclose before the floating rate is implemented and have secured a low fixed rate.
Home Loan Interest Rates
Several factors, including the applicant's credit score, loan size, time frame, and others, affect the interest rates charged on house loans. Before applying for a house loan, the applicant is advised to review the current interest rates charged by various lenders. The borrower's total interest rate can be subject to a variation in interest rates.
Top 10 Banks with the Lowest Home Loan Interest Rates in India
The top ten banks in India with the lowest house loan interest rates are listed here. The table is arranged as follows:
Name of the Bank | Interest Rate Per Annum |
Union Bank of India | 8.35% - 12.65% |
Bank of Maharashtra | 8.35% - 10.90% |
Bank of Baroda | 8.40% - 11.60% |
State Bank of India | 8.50% - 9.85% |
Canara Bank | 8.50% - 11.95% |
Karnataka Bank | 8.75% - 11.45% |
HDFC Bank | 8.75% - 9.95% |
ICICI Bank | 8.90% - 12.05% |
Punjab National Bank | 9.40% - 12.10% |
Tamilnad Mercantile Bank | 9.45% - 9.95% |
Factors Affecting Home Loan Interest Rates
Your home loan interest rates are influenced by the following factors. Therefore, you must investigate them before submitting a loan application:
Credit Score: A credit score of 750 or higher from CIBIL and other bureaus represents your credit history numerically and indicates responsible credit behaviour, which makes house loans more favourable. Rates of interest on house loans are calculated by lenders and other financial organisations using credit scores, and applicants with higher scores receive reduced rates.
Earnings and Employment: Income, occupation type, and employer profile are all factors taken into account by lenders when evaluating the eligibility of an applicant for a house loan. Government employees, PSU employees, and employees of reputable private sector companies are given preference since they have more job and income security, which lowers the interest rates on home loans. However, irregular or insufficient income may lead to higher rates of interest or make it challenging to get a loan.
Housing Loan Type: Interest rates differ based on the type of house loan. Standard interest rates apply to regular house loans, although they may be higher for any particular loan.
Amount of Loan: The interest rates on the housing loan are determined by the required loan amount. Interest rates for loans up to Rs. 30 lakh are often lower, and a sizable down payment can further lessen the interest burden and cut the interest rate.
Type of Interest Rate: Repayment is impacted by the type of interest rate selected (fixed or floating). While the EMI for a floating-rate loan varies based on variables like the repo rate, the EMI for a fixed-rate loan remains consistent throughout. Since fixed-rate home loans entail more interest rate risk, they tend to have higher interest rates.
Women's Interest Rate Concession: Female borrowers can get a 0.05% interest rate reduction from certain lenders. By selecting a shared home loan with the spouse as the sole applicant, couples can increase their ability to qualify and take advantage of tax benefits.
Location of the Property: The interest rate on your home loan is highly affected by the location of your property. Interest rates are usually lower for homes in desirable neighbourhoods with sufficient amenities, while they can be higher for homes in less popular neighbourhoods. Homes that have a high resale value are preferred by lenders, which affects the interest rates that are set.
MCLR Rates: Banks are allowed to offer loans at the lowest interest rates known as marginal cost of funds lending rates, or MCLR rates. These rates are not fixed and are liable to change based on variables including tenure premium, CRR, and operating costs. On an assigned reset date, banks generally conduct an annual assessment to figure out the current home loan interest rate and make the necessary modifications.
Calculation of Home Loan Interest Rates
Since home loans are spread out over a longer time frame, it is important to know the entire amount of interest that will be owed upfront. Use one of the following strategies to find out:
Formula for Manual EMI Calculation
The EMI Calculation Formula is available to you: EMI = [P x r x (1+r)^n] / [(1+r)^n-1]. Where n is the number of instalments or the loan's term in months, P is the principal, and r is the interest rate.
EMI Calculator
By entering essential information such as the loan amount, interest rate, and repayment period, customers can utilise the TaxBuddy Home Loan EMI Calculator. Click "Calculate" after submitting these details to obtain an extensive description that specifies the amount owed for principal and interest.
Tips to Secure the Lowest Home Loan Interest Rates
Multiple variables influence home loan interest rates. Therefore, to get the lowest home loan interest rate in India, you can adhere to the following advice:
Aim for a credit score with a minimum of 750 to maintain a strong credit score.
Transferring their outstanding debt to a different lender with lower interest rates may allow current home loan borrowers to reduce their interest rates. Home loan balance transfer is the term for the procedure.
Some lenders give female applicants interest rate reductions, so seek a joint property loan, especially with a family member.
A lower Loan-to-Value (LTV) ratio is the goal for home loan applicants to receive cheaper interest rates. This can be achieved by making the largest down payment attainable, leading to a smaller loan amount and, in turn, lower interest rates on home loans.
Conclusion
It could be challenging to find the best house loan interest rate in India. However, you can get your house loan at the best interest rate based on your financial situation if you follow the suggestions listed above and give it due consideration. Contact the closest branch of your preferred bank for the most recent interest rates.
FAQ
Q1. What is the home loan interest rate?
In addition to the principal amount, it is the interest rate you must pay when you pay off your house loan. In India, the yearly rate of interest on housing loans begins at 8.30%. However, your suitability and several other factors will decide the final applicable interest rate.
Q2. Which bank gives a low interest home loan?
In 2024, organisations like Union Bank of India, Bank of Maharashtra, Bank of Baroda, Canara Bank, and State Bank of India provide the lowest home loan rates, ranging between 8.35% and 8.50%.
Q3. Which bank offers the lowest interest rate for home loans?
Union Bank of India and Bank of Maharashtra offer the lowest house loan interest rates, being as low as 8.35% p.a.
Q4. Is SBI giving a 90% home loan?
The State Bank of India, or SBI, offers home loans up to 90% of the purchase price, contingent on your eligibility and other terms and circumstances.
Q5. What is the SBI home loan interest rate?
The SBI home loans are available at an interest rate varying from 8.60% to 9.45%.
Q6. Is it possible to get a home loan with zero interest?
No, banks or other lending organisations do not provide interest-free house loans.
Q7. What is the pre-EMI interest rate of a home loan?
A home loan may be paid out in installments based on the housing project's completion stages. Until the loan amount is finally issued, borrowers might be required to pay back the interest they have accrued on the disbursed loan amount. Pre-EMI interest is the term for this. From the first date of disbursement to the beginning of EMI, pre-EMI interest is assessed every month.
Q8. Which bank is better for a home loan, private or government?
In general, public banks provide better terms than private ones. Lower processing fees, better interest rate adjustments in reaction to the RBI's repo rate drop, and free prepayment at any time are some of its advantages. Additionally, public sector banks offer a greater variety of home loan programs to accommodate varying income brackets and have flexible qualifying requirements.
Q9. Which home loan interest rate is better among floating or fixed?
Home loans with fixed interest rates are provided by some banks, and the interest rates imposed are higher. Furthermore, because house loans have a maximum of 30-year term, borrowers will see many changes in the interest rate cycle during the course of their loan. According to the interest rate cycle, this makes it challenging for any borrower to pay back the home loan.
Q10. What is the EMI for a home loan of Rs. 10 lakh?
Your preferred tenure and the relevant interest rate will influence your EMI for a house loan of Rs. 10 lakh. You can determine your EMI using the home loan calculator after you have verified these.
Q11. What will be the EMI for 15 lakhs?
Your EMI for a house loan of Rs. 15 lakh will be determined according to the preferred tenure and the applicable interest rate. After you have confirmed these, you may determine the EMI using the home loan calculator.
Q12. What is the interest on a home loan of Rs. 20 lakh?
The interest rate and duration that apply to your Rs. 20 lakh home loan will determine your EMI. You can use the home loan tool to calculate your EMI after you have verified these.
Q13. Is the home loan rate less for women?
Yes, the majority of entities provide women with lower interest rates on house loans.
Q14. Will home loan interest rates go down in 2024 in India?
Interest rates on house loans might not be lowered until the middle of 2024 because the RBI plans to keep the amortisation rate at 6.50%.
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