Finding the best home loan interest rates is crucial when purchasing a house. With various banks offering competitive rates, it’s essential to stay updated on the latest rates and terms. This guide covers the latest home loan interest rates in India from leading banks like SBI, HDFC Bank, Axis Bank, and more, helping you make an informed decision.
Latest Home Loan Interest Rates in India
| Bank | Interest Rate (per annum) | Processing Fees | Tenure |
|---|---|---|---|
| SBI | 8.25% – 9.20% | Up to 0.35% of loan amount | Up to 30 years |
| HDFC Bank | 8.75% onwards | Up to 1% of loan amount | Up to 30 years |
| Axis Bank | 8.75% onwards | 0.5% – 1% of loan amount | Up to 30 years |
| ICICI Bank | 8.70% – 9.40% | 0.50% of loan amount | Up to 30 years |
Choosing the right home loan can save you lakhs of rupees over time. By comparing the latest home loan interest rates from SBI, HDFC, Axis Bank, ICICI Bank, and others, you can secure the best deal that suits your financial needs. Also, explore government schemes like PMAY to avail subsidies and lower EMI burdens. Make sure to check your credit score, compare loan options, and negotiate processing fees before finalizing your home loan.
Understanding Home Loan Interest Rates
What Are Home Loan Interest Rates?
A home loan interest rate is the percentage charged by a bank or lender on the principal loan amount. The rate determines how much extra you will pay over time in addition to the borrowed amount.
Types of Interest Rates
- Fixed Rate: The interest remains constant throughout the loan tenure.
- Floating Rate: The interest varies based on market conditions, often linked to the Repo Rate set by the RBI.
- Mixed Rate: The loan starts with a fixed rate and later shifts to a floating rate.
See also: Canara Bank Fixed Deposit Scheme: Bumper Interest Returns on 270 Days FD
Latest Home Loan Interest Rates by Major Banks
1. State Bank of India (SBI) Home Loan Rates
- Interest Rate: 8.25% – 9.20% per annum
- Processing Fee: Up to 0.35% of loan amount
- Maximum Tenure: 30 years
- Special Offers: Lower interest rates for women borrowers
2. HDFC Bank Home Loan Rates
- Interest Rate: 8.75% onwards
- Processing Fee: Up to 1% of loan amount
- Maximum Tenure: 30 years
- Special Offers: Customized rates for salaried and self-employed individuals
3. Axis Bank Home Loan Rates
- Interest Rate: 8.75% onwards
- Processing Fee: 0.5% – 1% of loan amount
- Maximum Tenure: 30 years
- Special Offers: No prepayment charges on floating-rate loans
4. ICICI Bank Home Loan Rates
- Interest Rate: 8.70% – 9.40%
- Processing Fee: 0.50% of loan amount
- Maximum Tenure: 30 years
- Special Offers: Attractive rates for first-time homebuyers
Additional Home Loan Fees & Charges
Apart from interest rates, banks may charge additional fees, such as:
- Processing Fees: Charged at the time of loan application.
- Prepayment Charges: Some banks levy a fee if you pay off your loan early.
- Legal & Technical Fees: Costs associated with property verification and legal processing.
- Late Payment Charges: Penalties for missing EMI payments.
Government Home Loan Schemes & Benefits
The Government of India offers several home loan schemes to support home buyers:
1. Pradhan Mantri Awas Yojana (PMAY)
- Provides interest rate subsidies for first-time home buyers.
- Beneficiaries in EWS, LIG, and MIG categories receive different levels of subsidies.
- Check eligibility and apply at pmaymis.gov.in.
2. CLSS (Credit Linked Subsidy Scheme)
- Part of PMAY, offering subsidies of up to ₹2.67 lakh.
- Reduces EMI burden by lowering the loan’s effective interest rate.
3. RBI Guidelines for Affordable Housing Loans
- The RBI offers priority-sector lending benefits for affordable housing.
- Lower interest rates and reduced processing fees for eligible borrowers.
Factors Affecting Home Loan Interest Rates
Several factors influence home loan interest rates, including:
- RBI’s Repo Rate: When the RBI increases or decreases the repo rate, banks adjust their lending rates accordingly.
- Credit Score: Higher scores (750+) lead to better interest rates.
- Loan Amount: Higher loan amounts may have different rate structures.
- Employment Type: Salaried individuals often receive lower interest rates than self-employed borrowers.
- Loan Tenure: Shorter tenures usually have lower interest rates.
See also: RBI’s New Rule – Here’s How Much Money You’ll Get Back if the Bank Collapses
How to Get the Best Home Loan Rate?
Here are some practical tips to secure the best home loan rate:
- Improve Your Credit Score: A score above 750 improves chances of getting a lower rate.
- Compare Multiple Banks: Check rates from multiple banks and NBFCs before deciding.
- Choose Floating Over Fixed Rates: Floating rates may offer savings in the long run.
- Negotiate Processing Fees: Many banks offer discounts on processing fees.
- Apply During Festive Seasons: Banks often reduce rates and fees during Diwali, Holi, and other festivals.
Latest Home Loan Interest Rates in India FAQs
1. Which bank has the lowest home loan interest rate in 2025?
As of February 2025, SBI and ICICI Bank offer the lowest rates starting at 8.25% and 8.50% respectively.
2. Is it better to choose a fixed or floating interest rate?
A floating interest rate is better if market rates are expected to decrease, while a fixed rate provides stability for those who prefer consistent EMIs.
3. How can I reduce my home loan EMI?
- Choose a longer tenure (though this may increase total interest).
- Make a higher down payment to reduce the principal amount.
- Balance transfer to a bank offering a lower rate.
4. Are there any tax benefits on home loans in India?
Yes, under Section 80C and Section 24(b) of the Income Tax Act, borrowers can claim deductions on principal repayment and interest paid.
