Top 10 Banks with Low Interest Rate on Home Loan 2024

Finding your dream home can be troublesome, especially when you don't have enough money in the Bank. But there are many banks and financial institutions Offering low-interest rates on home loans. Recently, the Reserve Bank of India has directed all scheduled local banks, commercial banks and small financial institution to link interests rates of all retail loans including home loans.

Most commercial banks have opted the RBI’s repo rate, which has applied the Floating Rate. The interest rate applied to the repo rate is called a Repo Rate Linked Lending Rate (RLLR). According to the RBI, the banks are allowed to charge a margin plus risk premium over and above the external benchmark rate from the borrowers.

Low-Interest Home Loans for Self Employed

There are many banks in India offering lowest Home Loan rates for self-employed individuals.

Here’s the table below that guides you to the home loan interest rates in India:

Home Loan Lower Interest Rate for Salaried Individuals

Salaried individuals looking for home loan can avail at low interest rates.

Here are the top banks in India offering low interest rates home loan:

Key Factors Under Home Loan

• Eligibility

A home loan is available for both salaried and self-employed borrowers with the age between 18 to 70 years.

• Security

You can get the home loan for various purposes, such as - purchase of a new house, renovation or construction.

• Loan Amount

You can opt a loan in the Range of Rs. 2 lakh to Rs. 15 crores.

• Loan to Value Ratio

Loan to Value Ratio (LTV) is a ratio of the loan amount you can obtain given the Market value of your property. Ideally, the LTV against property ranges between 40% and 75% of the property value.

• Loan Tenure

The tenure for repaying home loan ranges from 5 to 30 years

• Home Loan Interest Rates Benchmark

According to the RBI guidelines, most banks have shifted to RLLR (Repo Link Lending Rate) that is based on the repo rate.

• Interest Rates

The home loan interest starts from 6.95% p.a., and there are special rates for women borrowers.

• Lowest EMI

The lowest EMI is as low as Rs. 662 per lakh.

• Processing Fees

The processing fees on the home loan is up to 0.5% of the loan amount or maximum Rs. 10,000, whichever is higher.

• Prepayment Charges

A prepayment is a penalty charge that you have to pay to the bank if you decide to repay the loan before the end of its term. As an applicant, you decide to close your loan before time to reduce your borrowings and monthly interest burden. There are no charges on floating rate home loans.

Home Loan Calculator

A home loan is dependent on three factors - loan amount, housing loan interest and tenure. This will guide you to total loan interest and loan amount to buy a home.

You can also check the details of the EMI for different amounts and tenure.

Smart Tips to Get Low-Interest Home Loan

There are a few factors that can help you get the home loan at lower interest rates. Here’s the ways-:

Good Credit Score

Your Credit Score shows your creditworthiness. According to the RBI guidelines, banks should consider borrowers with a Good Credit score. A score above 750 is considered to be an ideal score, which gives you the privilege of getting a loan at a cheaper rate. In case, if you have a low credit score, then you may have to end up paying higher interest rates.

Apply for Home Loan Jointly

You can get the lowest interest rates on home loans if you apply with your wife and make her primary applicant of your home loan. A majority of banks provides interest concession on home loan for women, which is less than 0.5% of the general rates. Applying jointly for a home loan can increase a home loan approval and you can gain home loan tax benefits.

Increase Down payment

The loan amount is another Factor that will affect your home loan rates. Usually, a higher loan amount attracts higher interest rates. To get low-interest rates on the home loan you should contribute more to your down payment.