Get the best home loan interest rates in 2024 based on your credit score, earnings, stability of job and repayment history. Banks and housing financiers are offering lowest home loan interest rates for various repayment tenures. Individuals showcasing a credit score above 750 can secure the best home loan interest rates. Lowest home loan interest rates are being offered to women home loan borrowers and government employees.
Updated: 14-05-2024 04:18:01 PM
| Interest Rate | Starting @ 8.50% p.a. |
|---|---|
| Processing Fee | Up to 0.25% |
| Loan Tenure | 5 to 30 years |
| Lowest EMI Per Lakh | Rs. 769 for 30 years |
| Prepayment Charges | Nil |
| Bank Name | Interest rate (%) | Processing fee |
|---|---|---|
| HDFC Bank Home Loan | 8.75% – 9.65% | Up to 0.50% of the loan amount + applicable taxes |
| HSBC Bank Home Loan | 8.45% | Up to 1.00% of the loan amount + applicable taxes |
| Kotak Mahindra Bank Home Loan | 8.70% | Up to 0.50% of the loan amount + GST |
| IDFC Bank Home Loan | 8.75% | Up to 3% |
| PNB Housing Finance | 8.50% | Up to 0.50% of loan amount + GST |
| Federal Bank Home Loan | 8.80% | 0.50% of loan amount |
| Bajaj Finserv | 8.50% – 15.00% | Up to 7% of loan amount + GST |
| L&T Housing Finance | 8.65% | Up to 0.25% of loan amount + GST |
| ICICI Bank Home Loan | 8.75% | 0.50% – 2.00% of the loan + applicable taxes |
| Bank Name | Interest rate (%) | Processing fee |
|---|---|---|
| SBI Bank Home Loan | 8.50% – 10.05% | 0.35% + GST |
| Central Bank of India | 8.50% – 9.50% | Completely waived till 31.12.2023 |
| Bank of Baroda Home Loan | 8.40% – 10.60% | Rs. 8000 + GST |
| Bank of Maharashtra | 8.35% – 8.90% | 0.25% of the loan amount |
| Bank of India Home Loan | 8.30% | Up to 0.50% of the loan amount |
| Punjab National Bank | 8.40% – 10.25% | Full waiver of processing fees till 31.03.2024 |
| Union Bank of India Home Loan | 8.35% | 0.50% of the loan amount (Max. Rs. 15,000) + GST |
Many home loan lenders even factor in the income sources of their home loan applicants when deciding their rates. Generally, lenders charge lower rates from salaried individuals as compared to self-employed individuals.
Among self-employed, chartered accountants and doctors generally hold higher chances of getting their home loans approved at lower rates. Among salaried, government and PSU employees are most preferred by lenders owing to their job security and income certainty. They are followed by the ones employed in reputed and large private sector organisations as these companies are generally looked upon as stable and have increased potential to face economic downturns as compared to other private companies. It lowers the credit risk perception of the lenders resulting in them enticing such employees by offering them lower home loan rates.
Here, we will share the best home loan interest rates offered to government employees:
| Name of Lender | Interest Rate (%) |
|---|---|
| Punjab & Sind Bank (PSB Apna Ghar-Sahaj)
(Available to permanent employees of Central/State Governments/PSUs) |
8.50% to 10% |
| Punjab National Bank (PNB Pride Housing Loan For Government Employees)
(For permanent employees of Central/State Governments/Defence Personnel & Paramilitary forces ) |
8.40% – 10.25% |
To promote financial independence among women, most lenders usually offer the best home loan interest rates to women borrowers. Such rates are usually lower than other individual rates. Usually, the concessional interest rate offered to women borrowers by lenders is 5 bps.
| Name of Lender | For Women |
|---|---|
| HDFC Bank | 8.75% – 9.65% |
| Kotak Mahindra Bank | 8.70% |
| State Bank of India | 8.50% – 10.05% |
| Punjab National Bank | 8.40% – 10.25% |
As a home loan is a big-ticket loan, lenders carefully conduct an in-depth evaluation of the applicant’s credit history, income, repayment capacity etc. For the applicants looking for a home loan, it is important that they are well aware of the factors that lenders look upon when processing their home loans. Knowing such factors can help them get their home loan approved at lower rates.
Here is a list of some factors looked upon by home loan lenders to set your interest rate:
Lenders consider the applicant’s score to be one of the important factors when evaluating his home loan application. Those having a score of 750 and above are generally looked upon as creditworthy and have increased chances of home loan approval at lower rates. It is because those with lower scores are usually considered to be lacking financial discipline, which makes the lenders charge higher rates to make up for their increased risk of credit default.
Thus, if you are someone who have a poor credit score or is new to credit, consider building your credit score by using your credit cards regularly and in a disciplined manner. Once your credit score equals a score of 750 or above, apply for a home loan.
Lenders generally consider applicants having income as safer bets as they have higher disposable income. Those having lower disposable income are considered by the lenders to have higher default chances. Thus, many lenders charge such applicants with higher home loan rates.
Also, many of the lenders check the income sources of their home loan applicants when deciding their interest rates. Generally, lenders charge lower home loan rates from the salaried than self-employed people.
Doctors and chartered accountants under the self-employed section generally have higher chances of getting their home loans approved at lower rates. Among the salaried class, government employees and PSU are favoured the most owing to their job security and income certainty. Next are those who are employed in reputed private sector organisations that are preferred by the lenders for home loan approval at a lower interest rate. It is because such companies where these individuals are working are considered to be highly stable with a higher potential to face economic downturns as compared to the other private companies. It lowers the lender’s credit risk perception resulting in them enticing such staff/employees through lower home loan rates.
There are many lenders offering preferential rates on home loans to their existing customers. Such relations can be in the form of current, savings or FD accounts or in the form of credit cards or various other loan options. Thus, those seeking a home loan should begin their loan search by directly contacting their banks or NBFCs with whom they share long term existing banking relationships. Interest rates offered to such individuals can be looked upon as a benchmark to compare home loan rates offered by other lenders.
The loan amount that you are looking to borrow can even impact the interest rate of a home loan. Usually, home loans of up to 30 lakh come at lower rates than loans available at higher amounts. For availing of the best home loan interest rates, you should choose to make a higher down payment contribution from your own resources. It lowers the lender’s credit risk, which in turn helps at boosting your chances to avail home loan at a lower interest rate.
Thus, the prudent ways to get your home loan at lower interest rates are keeping a CIBIL score of 750 and above, making higher down payment contribution from your own funds, widening your home loan search horizon, which includes contacting those banks or NBFCs with whom you already share a banking relationship. Owing to your long term good relationship with a bank, you may get a home loan at a lower interest rate.
Lenders offering the lowest interest rate on a home loan is HDFC Bank. They are offering the best home loan interest rates of 8.75% – 9.65% p.a. Other lenders offering the best home loan interest rate of below 8.50% p.a. are Bank of Baroda, State Bank of India, Union Bank of India, ICICI Bank, Central Bank of India, Punjab National Bank, Canara Bank, Bank of India, UCO Bank, HDFC Ltd, IDBI Bank, Bajaj Finserv, Tata Capital and LIC Housing.
Presently HDFC home loan rate ranges between 8.75% – 9.65% p.a.
Loan EMI for a home loan of Rs 50 lakh loan amount, 20 years tenure and interest rate of 8.50% p.a. would be Rs. 43,391. If the repayment tenure is increased to 30 years with other components, that is, loan amount and interest rate remaining the same, the loan EMI would be Rs 38,446. In case the repayment tenure is decreased to 10 years, with other components, i.e. loan amount and interest rate staying the same, loan EMI would equal Rs 61,993.
One can avail of lower home loan interest rates by widening their home loan search horizon. Besides the interest rate, applicants should also factor in the processing fee and prepayment charges when zeroing on a particular lender. Doing so is crucial as the interest rate and various other linked charges vary across lenders basis their credit risk assessment of the loan applicant. For instance, many home loan lenders might offer lower home loan rates and processing charges to the ones with higher scores equalling 750 and above. Many lenders also decide their rates based on the applicant’s job.
Hence, applicants should initially begin their home loan search by approaching those with whom they already share a relation. After this, such applicants should approach online lending marketplaces to compare rates and other features provided by other lenders. One’s final application for a home loan must be with the lender offering the lowest home loan rate for the adequate loan amount and optimal loan tenure.
Yes, it’s possible to negotiate home loan interest rates with your lender. However, your ability to negotiate will depend on your creditworthiness, the competition among lenders, and current market conditions.
Your credit score plays a crucial role in determining your home loan interest rate. The higher your credit score, the lower the risk you pose to lenders, which can result in a lower interest rate. If your credit score is low, you might face higher interest rates or even struggle to get approved for a loan.
