The increased interest rest also leads to higher EMI burden. Also, the borrowers who already have availed home loans at a floating interest rate will have to pay higher EMI.
The home loan interest rates have significantly increased since May 2022 after the Reserve Bank of India (RBI) hiked the repo rates by 250 bps. This development has considerably increased the financial burden on existing home loan borrowers. Moreover, it is deterring others from applying for a home loan due to higher interest rates that have gone past over 10 per cent per annum.
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Home loans remain one of the most convenient ways for home buyers to acquire a new residential property. However, the increased interest rest also leads to higher EMI burden. Also, the borrowers who already have availed home loans at a floating interest rate will have to pay higher EMI.
There are many lenders, who are offering home loans at lower interest rates as the RBI has kept the repo rate unchanged in its latest monetary policy review.
Banks offering home loans at lowest interest rates
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State Bank of India (SBI)
The largest public sector lender offers the lowest interest rates on home loans. The rates range between 8.60 per cent and 9.45 per cent per annum. The borrowers with a credit score of higher than 749 points can avail the loan at an interest rate of 8.60 per cent. Also, the bank is currently offering discounts of up to 65 bps to eligible borrowers, which brings down the interest rate to 7.95 per per annum. The last date to avail these concessions is December 31, 2023. However, those with a low CIBIL score may have to pay an interest of up to 9.45 per cent per annum.
HDFC Bank
The largest private sector bank, HDFC Bank, is offering home loans starting at 8.50 per cent per annum, which is applicable for salaried employees and self-employed individuals. However, the final rates depend on the applicant’s CIBIL score and the tenure. The standard rates by HDFC Bank are much higher as they range between 8.75 per cent and 9.4 per cent annually.
Kotak Mahindra Bank
Kotak Mahindra Bank charges 8.75 per cent to 9.35 per cent annual interest rate on home loans.
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ICICI Bank
ICICI Bank charges home loan interest rates ranging between 9.25 per cent and 9.90 per cent per annum. The final rates depend on the total loan amount and the borrower’s credit score. However, for borrowers with a CIBIL score of 750 or more the interest rate can come down to 9 per cent.
IDFC First Bank
The lowest interest rate offered by IDFC First Bank is 8.85 per cent, which is available for salaried employees. On the other hand self-employed individuals can avail home loans at rates starting from 9.25 per cent.
LIC Housing Finance
LIC Housing Finance offers home loans at a starting interest rate of 8.45 per cent per annum. The interest rate can vary depending on the loan tenure and total amount.
