List of Banks Providing the Lowest Home Loan Interest Rates in India

We all prefer the lowest interest rate for home loan to buy a house through a housing loan. Taking a home loan with low interest rate will not only reduce the EMI but also the interest payout. Therefore, we should search for the lowest home loan interest rate 2021 while going to purchase a house.

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Best Banks for Home Loan

There are more than 50 banks and HFCs offering home loans in India. It makes choosing the lowest home loan interest rate bank a difficult process. If you’re planning to take a housing loan and want to know which is best home loan bank. If your answer is yes then here’s a list of banks providing the lowest home loan interest rate in India.

Types of Interest Rates for Home Loans

There are two different types of interest rates charged by most banks.

1. Fixed Rate of Interest

In this, the rate of interest remains constant throughout the entire tenure. That means there will be no change in the interest rate.

Availing a fixed rate helps you in planning repayment and managing finances efficiently.

2. Floating Rate of Interest

In this, the interest rate is not fixed and remains variable due to various contributing factors. The rate of interest keeps changing based on the benchmark rate linked to housing finance. Since the rate is not fixed, therefore, your EMI may increase or decrease abruptly.

Factors that affect Home Loan Interest Rates

The rate of interest will depend upon your profile, type of property, tenure, amount, and other risk parameters. The factors that affect the housing loan interest rate in India are listed below.

1. Type of interest rate

There are two types of housing loan interest rates – fixed and floating. The type of interest rate chosen by you will determine the rate at which you will repay your loan amount.

2. Your credit score

Your credit score is an important factor that is considered by lenders before lending a loan. A lower credit score attracts a higher interest rate on home loans and vice-versa.

3. Loan amount

The amount you wish to borrow also affects the rate at which you get the housing loan. A small amount will attract a higher interest rate, while a higher amount will attract a lower interest rate.

4. Type of occupation

Salaried individuals get a lower interest rate as compared to self-employed individuals. This is so because salaried individuals have a stable source of income.

5. Type of housing loan

Types of housing loans also affect home loan interest rates. Regular home purchase loans are offered at a lower rate while loans for plots or home improvement have higher rates.

6. Gender of the applicant

Some lenders offer a concession on interest rates for women borrowers.

7. External benchmark rate

The housing loan interest rates of all banks in India are also affected by external benchmark rates.

17 Banks Lowest Home Loan Interest Rate India

The banks mentioned in the table below are the bank with lowest housing loan interest rate 2021. You can compare of home loan interest rate from the table below to find best banks for a home loan.

S. No.	Bank	Interest Rates in % per annum
1	HSBC Bank	6.74
2	Kotak Mahindra Bank	6.75
3	Citi Bank	6.75
4	Union Bank of India	6.8
5	State Bank of India	6.8
6	Punjab National Bank	6.8
7	HDFC Bank	6.8
8	ICICI Bank	6.8
9	Bank of India	6.85
10	Central Bank of India	6.85
11	Bank of Baroda	6.85
12	Canara Bank	6.9
13	Punjab & Sind Bank	6.9
14	Axis Bank	6.9
15	UCO Bank	6.9
16	IDBI Bank	6.9
17	Bank of Maharashtra	6.9

Note: These are the lowest interest rate for home loan in India. The data are taken from the respective bank’s websites as of February 27, 2021. The today’s rates for home loan mentioned above are subject to change at the discretion of the bank.

Which bank has the lowest home loan interest rates?

As per the table above, the minimum home loan interest rate is 6.74%. HSBC Bank offers the lowest interest rate of 6.74%. Kotak Mahindra Bank and Citibank offer the interest rate of 6.75%.

As per a tweet by SBI Bank, SBI home loan rates reduced. Now get your dream home at 6.70% onwards.

SBI home loan interest rates reduced. Get your dream home at 6.70%* onwards.

What are you waiting for? Apply Now at https://t.co/NeeHLbI8DP

*T&C Apply.#SBI #StateBankOfIndia #HomeLoan pic.twitter.com/pmAhTR4ry3

— State Bank of India (@TheOfficialSBI) March 2, 2021

FAQs – Frequently Asked Questions

1. What is home loan interest rate?

It is the percentage of the principal amount that is charged by the bank for using the principal amount.

2. Which bank has lowest home loan interest rates?

At present, the HSBC Bank is offering the lowest interest rate for a housing loan which is 6.74% p.a. However, the interest rates offered by banks can decrease or increase as per the banks’ discretion.

3. How to get lowest home loan rates in India?

Always compare rates offered by lenders to get the lowest rates. Use a home loan EMI calculator for comparing the rates.

4. How to reduce home loan interest?

You can consider the following ways to reduce your loan interest.

(i). Always choose a shorter tenure

(ii). Try to make regular prepayments

(iii). Look for a lower interest rate and get a balance transfer

5. What is the EMI for 20 lakhs home loan?

You can use a home loan EMI calculator to know the EMI for 20 lakhs loan.

6. Can I get 100% home loan?

No. The banks and HFCs (Housing Finance Company) finance around 75% to 90% of the property cost.

Final Thoughts

The banks mentioned in the table above are the bank with the lowest home loan interest rates in India. You can use this table to find the best bank for home loan in India. Note that these rates are subject to change at the discretion of the bank.