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Top 5 Banks for Home Loan with Low-Interest Rates

Updated on April 26, 2024 , 33142 views

Are you looking for a Home Loan? Taking a housing loan is not a difficult process, if you have all the legal documents in the right place. There are many banks Offering home loans with attractive interest rates. Most of the private and public sector banks provide financing for 75-90% of the cost of the property, which makes the process viable to buy your dream home.

If you are unable to make decisions on the loan, then here's a list of top banks offering home loans with best interest rates. Take a look!

Lowest Home Loan Interest Rates

1. SBI Home Loan

SBI has strong verification measures in the home loan. So, while applying for a loan, ensure all the legitimate papers of the property are ready. This will make your loan process easy.

The Bank offers a loan for the house purchase, house construction, home renovation and so on.

The interest rate of SBI is usually lower than other banks, but it offers floating interest rates. The interest rate is charged on daily reducing balance as the principal is recalculated at the end of every day and then it charges the interest rate. For instance, if you make the part-payment today, then the interest outgo on the loan reduces starting from the very next day.

Particulars	Rates
Fixed Interest Rates	None
Floating Interest Rates	8.7% – 9.1%
MaxGain interest rate (Overdraft Loan interest rate)	8.75% – 9.45%
Processing Fees	Up to Rs. 10,000
Maximum Tenure	30 years
Pre-closure Charges	Nil
LTV	90% for – < Rs. 20 lakhs 80% for – > 20 lakhs
Part-Payment Charges	Nil

2. ICICI Bank Home Loan

ICICI Bank is well known for its simplified documentation process with speedy approvals. They offer loans for house purchase, house constructions and top-up home loans. ICICI offers fixed interest rates and floating interest rates up to Rs.5 crores with 30 years of the loan tenure.

The home loan interest rate is charged in monthly reducing balance. The principal amount is calculated at the end of every month through which the interest rate is calculated. In case you make a part-payment, then the interest outgo on your loan reduces starting from the 1st of next month.

Particulars	Rates
Fixed Interest Rates	9.9% – 10.25%
Floating Interest Rates	9.15% – 9.6%
Processing Fees	0.50% – 1.00% of the loan amount or Rs. 1500/-whichever is higher (Rs. 2000/- for Mumbai, Delhi & Bangalore)
Maximum Tenure	30 years
Pre-closure Charges	Nil for floating-rate loans 2% for fixed-rate loans
LTV	90% for loan value less than Rs. 20 lakhs 80% for loan value of more than 20 lakhs 75% for loans above Rs. 75 lakhs
Part-Payment Charges	No charges for part-payment Min. part-payment should be equal to one EMI

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3. HDFC Home Loan

HDFC has a robust verification of the property documents and it provides doorstep services with easy application and document submission process.

The interest rates are competitive and the bank provides loans for house purchase, house construction, home improvement and home extension.

Particulars	Rates
TruFixed Interest Rate	9.3% – 10.05%
Floating Interest Rates	8.8% – 9.55%
Processing Fees	0.50% or Rs. 3000/- whichever is higher
Maximum Tenure	30 years
Pre-closure Charges	No charges if paid from own sources and 2% if refinanced
LTV	90% for loan value less than Rs. 20 lakhs 80% for loan value of more than 20 lakhs 75% for loans above Rs. 75 lakhs
Part-Payment Charges	Nil

4. Axis Bank Home Loan

Axis bank provides home loans for purchase, construction and top-up loans. The interest rate is competitive, but the processing fees are fixed if you take a loan of any amount.

Ensure that the house you are buying should have all regulatory and environmental clearances in place. Or check if your project is approved by your bank. This will also help faster approval of your home loan application.

Particulars	Rates
Fixed Interest Rate	12% for all cases
Floating Interest Rates	8.85% – 9.1%
Processing Fees	Up to Rs. 10000
Maximum Tenure	30 years
Pre-closure Charges	No charges for floating-rate loans and 2% for fixed-rate loans
LTV	90% for loan value less than Rs. 20 lakhs 80% for loan value of more than 20 lakhs 75% for loans above Rs. 75 lakhs
Part-Payment Charges	2% for fixed-rate loans

5. Bank of Baroda Home Loan

Bank of Baroda provides loan at very competitive interest rates. They also offer loans for house purchase, construction and renovation. You can get a pre-approved home loan before the identification of a specific house/Flat/plot by a prospective applicant of the loan.

In all, you won't only enjoy affordable interest rate on a Range of home loans, but you also get to enjoy the tax saving benefits.

Particulars	Rates
Fixed Interest Rate	Not offered
Floating Interest Rates	8.65% -11.25%
Processing Fees	Fixed fee of Rs. 7500
Maximum Tenure	30 years, Can extend up to 70 years subject to Ts & Cs.
Pre-closure Charges	Nil
LTV	90% for loan value less than Rs. 30 lakhs 80% for loan value of more than 30 lakhs
Part-Payment Charges	Nil

Factors to Consider Before Applying for Home Loan

In a nutshell, you need to consider the following factors before applying for a home loan

Interest Rates

Interest rate plays a major role in any loan. Even a slight difference of 0.5% can make a huge difference in the interest rate. So, select the appropriate bank, which offers you home loan at a good interest rate.

Processing Fees

Check the processing fees with your bank if they charge a fixed amount or percentage of loan value as a processing fee. Make sure that the fee is just for processing your loan application, and it is taken separately.

Legal Fees

Legal charges are imposed on an individual when you submit your property documents to the bank for the verification. These verification charges may range from Rs. 5,000 to Rs. 10,000.

Pre-closure Charges

In pre-closure, one repays the loan before the loan tenure ends. Some banks impose a penalty charge for pre-closing the loan. Although, pre-closure does not help to lower the interest rates and debt burden. Every bank has different lock-in periods and the banks do charge for a pre-closure fee to repay on the interest amount lost.

Loan-To-Value (LTV) Ratio

LTV indicates the proportion of the property value which the bank is ready to finance. Ideally LTV is between 75-90% of the property value.

Part-payment Rules

Generally, the repayment of the principal and interest amount needs to be done in a specified time, in the form of monthly EMIs. But, at times, you may wish to pay a larger sum of money at one go to reduce your future EMIs or the total tenure. This is referred to as part payment. It is generally done for a total of at least 3 EMIs.

Many banks have strict rules of the part payment, but put a clause by limiting an amount or percentage of the loan which can be pre-paid.

Insurance Cover

You can buy an insurance cover for your home loan, but it is optional.

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Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.