Currently, Union Bank of India and Bank of Maharashtra offer competitive home loan interest rates starting from 8.35% annually. Other public sector banks like Punjab National Bank, Bank of India, Bank of Baroda, Indian Overseas Bank, and Canara Bank also have appealing rates beginning at 8.40%. However, the actual rate for a home loan is influenced by the applicant's credit score, requested loan amount, employment details, and their employer's profile. Even slight variations in rates can affect the total interest payable over the loan's lifespan. Therefore, it's essential for potential borrowers to compare rates from different lenders before finalizing a home loan.

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Home Loan Interest Rates Across Banks and HFCs

Interest rates on home loans can differ significantly based on an applicant's credit profile and a lender's policy. Hence, comparing housing loan rates from multiple lenders is advisable. The following table presents the latest home loan interest rates from top banks and Housing Finance Companies (HFCs) as of 5 July 2024:

• Bank of Baroda: 8.40% – 10.90%
• Punjab National Bank: 8.40% – 10.25%
• Punjab & Sind Bank: 8.50% – 10.00%
• State Bank of India (SBI): 8.50% – 9.85%
• Union Bank of India: 8.35% – 10.90%
• Bank of India: 8.40% – 10.85%
• UCO Bank: 8.45% – 10.30%
• Bank of Maharashtra: 8.35% – 11.15%
• Canara Bank: 8.40% – 11.25%
• Indian Overseas Bank: 8.40% – 10.60%

For private sector banks, the rates are:

• HDFC Bank Ltd.: 8.70% onwards
• Kotak Mahindra Bank: 8.70% onwards
• ICICI Bank: 8.75% onwards
• Axis Bank: 8.75% – 13.30%
• Karur Vysya Bank: 9.00% – 11.05%
• South Indian Bank: 8.70% – 11.70%
• Karnataka Bank: 8.50% – 10.62%
• Federal Bank: 8.80% onwards
• Dhanlaxmi Bank: 9.35% – 10.50%
• Tamilnad Mercantile Bank: 8.60% – 9.95%
• Bandhan Bank: 9.16% – 15.00%
• RBL Bank: 8.90% onwards

Top Housing Finance Companies provide rates such as:

• LIC Housing Finance: 8.50% – 10.75%
• Tata Capital: 8.75% onwards
• PNB Housing Finance: 8.50% – 14.50%
• Repco Home Finance: 10.00% onwards
• GIC Housing Finance: 8.80% onwards
• Sammaan Capital Ltd.: 8.75% onwards
• Aditya Birla Capital: 8.60% onwards
• ICICI Home Finance: 9.20% onwards
• Godrej Housing Finance: 8.55% onwards
• L&T Finance Ltd.: 8.65% onwards

International banks such as HSBC and Standard Chartered Bank have rates beginning at 8.50% and 8.95%, respectively.

Home loan interest is calculated using the monthly reducing balance method, which recalculates interest on the remaining principal after each EMI. This method ensures the interest component in EMIs diminishes over time as the principal is prepaid.

While manual EMI calculations might be tedious and error-prone, online tools like a Home Loan EMI Calculator come in handy. Enter the loan amount, interest rate, and tenure to swiftly find EMI, total interest payable, and total payment figures. For instance, a 15-year loan of ₹30,00,000 at 8% interest translates into an EMI of ₹28,669.56 and a total payable amount of ₹51,60,521.26, which includes ₹21,60,521.26 in interest.

Factors influencing home loan interest include:

• Credit Score: Scores above 750 are favorable.
• Income and Employment: Stable employment, especially with reputable entities, attracts better rates.
• Loan Amount: Loans below ₹30 lakh often have lower rates; larger down payments can further reduce rates.
• Loan Type: Specialized loans like those for plots may cost more.
• Interest Rate for Women: Women borrowers may receive a 0.05% concession.
• Type of Interest Rate: Fixed rates offer stability, while floating rates adjust with the market, affecting EMIs.

Fixed rates ensure predictable EMIs, suitable when rates might rise. Floating rates move with benchmarks, beneficial if rates are dropping. Hybrid loans offer both, starting fixed and then floating, useful if prepayment is considered.

Tips to lower interest rates include maintaining a healthy credit score, applying jointly with a female borrower for rate benefits, opting for balance transfers for better rates, and lowering the loan amount via larger down payments.

Understanding loan types, calculating cost, and evaluating influencing factors empowers borrowers to secure favorable home loan terms. Leveraging resources like EMI calculators supports informed decision-making, enhancing financial management and stability.