Before you decide to buy your dream house, it is important to check the interest rate most banks charge on their home loans. Even a marginal difference in the interest rate can lead to a significant difference in the total cash flow over a period of time.
For instance, when you borrow ₹50 lakh for 15 years, interest rate of 9 percent and 9.5 percent can lead to total cash outflow of ₹96.71 lakh and ₹99.48 lakh respectively, i.e., a difference of ₹2.77 lakh over the loan tenure.
This is why a little difference in the rate of interest can lead to a significant difference in the cash outgo later on.
Top banks offering lowest interest rates
HDFC Bank: HDFC Bank offers special interest rates in the range of 8.75 percent to 9.65 percent. The standard interest rate is between 9.40 percent to 9.95 percent. So, the lowest interest rate that the bank charges on home loan is 8.75 per cent and it goes up to 9.95 percent.
ICICI Bank: ICICI Bank charges two categories of interest rates on its home loans: special and standard interest rates.
Special rates: The bank charges interest rates in the range of 9 to 9.10 percent per annum based on the CIBIL score. For instance, when the credit score is 800, the bank charges 9 percent and when the score is between 750 to 800, the interest rate is 9 percent for salary borrowers and 9.10 percent for self-employed ones. These rates will be valid till May 31, 2024.
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Standard rates: These rates range between 9.25 percent to 10.05 percent based on the loan amount. When the loan amount is below ₹35 lakh, the interest rate is between 9.25 per cent to 9.65 percent. For loans between ₹35 to ₹75 lakh, interest rate is 9.5 to 9.95 percent, as the table below shows.
State Bank of India (SBI): SBI offers home loans in the range of 9.15 percent to 9.65 percent based on the CIBIL score. The higher the score, the lower the interest rate. When the CIBIL score is above 750, the bank charges 9.15 percent and when the score is between 550 to 649, the bank gives a loan at 9.65 percent. These rates came into effect from May 1, 2023 onwards.
Kotak Mahindra Bank: The private lender charges an interest rate starting 8.70 percent for salaried persons and 8.75 percent for self-employed. These are the minimum interest rates and the actual rate may be higher than this.
Bank of Baroda: The state lender charges interest in the range of 9.15 percent to 10.50 percent from salaried persons and 9.25 to 10.60 percent per annum from non-salaried persons.
