Home Loan Interest Rates 2025 - Starting From 8.10%* p.a

At present, Union Bank of India, Bank of Maharashtra and Central Bank of India are offering the lowest home loan interest rates starting from 8.10% p.a. onwards. The final interest rates offered would depend on the applicant's credit score, loan amount, occupation profile, employer’s profile, etc. As even a slight difference in the interest rate can lead to a significant difference in the total interest cost, prospective borrowers should compare the interest rates offered by as many lenders as possible before making the loan application.

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Updated: 01-04-2025 05:08:59 AM

Current Home Loan Interest Rates of Banks & HFCs April 2025

Name of Lender	Interest Rates (p.a.)
Name of Lender	Loans Up to Rs. 30 Lakh	Loans Above Rs. 30 Lakh to Rs. 75 Lakh	Loans Above Rs. 75 Lakh
State Bank of India	8.25% – 9.40%	8.25% – 9.40%	8.25% – 9.40%
HDFC Bank Limited	8.70% onwards	8.70% onwards	8.70% onwards
Bajaj Housing Finance	8.25% onwards	8.25% onwards	8.25% onwards
ICICI Bank	8.75% onwards	8.75% onwards	8.75% onwards
Axis Bank	8.75% – 12.80%	8.75% – 12.80%	8.75% – 9.65%
Federal Bank	8.80% onwards	8.80% onwards	8.80% onwards
Punjab National Bank	8.20% – 10.00%	8.15% – 9.90%	8.15% – 9.90%
Kotak Mahindra Bank	8.65% onwards	8.65% onwards	8.65% onwards
Bank of Baroda	8.15% – 10.40%	8.15% – 10.40%	8.15% – 10.65%
Canara Bank	8.25% – 11.00%	8.20% – 11.00%	8.15% – 10.90%
IDFC First Bank	8.85% onwards	8.85% onwards	8.85% onwards
IDBI Bank	8.40% onwards	8.40% onwards	8.40% onwards
Punjab & Sind Bank	8.35% – 9.85%	8.35% – 9.85%	8.35% – 9.85%
RBL Bank	9.00% onwards	9.00% onwards	9.00% onwards
LIC Housing Finance	8.25% onwards	8.25% onwards	8.25% onwards
Tata Capital Housing Finance	8.75% onwards	8.75% onwards	8.75% onwards
PNB Housing Finance	8.50% – 14.50%	8.50% – 14.50%	8.50% – 11.45%
Sammaan Capital (Formerly known as Indiabulls Housing Finance)	8.75% onwards	8.75% onwards	8.75% onwards
Aditya Birla Capital	8.60% onwards	8.60% onwards	8.60% onwards
India Shelter Finance	11.59% onwards	11.59% onwards	11.59% onwards
L&T Finance Limited	8.65% onwards	8.65% onwards	8.65% onwards
Godrej Housing Finance	8.55% onwards	8.55% onwards	8.55% onwards
Home First Finance	11.90% onwards	11.90% onwards	11.90% onwards
Easy Home Finance	8.99% onwards	8.99% onwards	8.99% onwards
Piramal Capital Housing Finance	9.50% onwards	9.50% onwards	9.50% onwards
Cholamandalam Investment and Finance	10.50% onwards	10.50% onwards	10.50% onwards

Note: Interest rates as of 18 March 2025

Home Loan Interest Rates Offered by Other Banks & HFCs

Name of Lender	Interest Rates (p.a.)
Name of Lender	Loans Up to Rs. 30 Lakh	Loans Above Rs. 30 Lakh to Rs. 75 Lakh	Loans Above Rs. 75 Lakh
Public Sector Banks
Union Bank of India	8.10% – 10.65%	8.10% – 10.65%	8.10% – 10.65%
Bank of India	8.15% – 10.60%	8.15% – 10.60%	8.15% – 10.85%
UCO Bank	8.30% onwards	8.30% onwards	8.30% onwards
Bank of Maharashtra	8.10% – 10.90%	8.10% – 10.90%	8.10% – 10.90%
Indian Overseas Bank	8.15% – 10.75%	8.15% – 10.75%	8.15% – 10.75%
Indian Bank	8.15% – 9.55%	8.15% – 9.55%	8.15% – 9.55%
Central Bank of India	8.10% – 9.60%	8.10% – 9.60%	8.10% – 9.60%
Private Sector Banks
Karur Vysya Bank	8.75% – 11.70%	8.75% – 11.70%	8.75% – 11.70%
South Indian Bank	8.50% onwards	8.50% onwards	8.50% onwards
Karnataka Bank	8.94% – 11.06%	8.94% – 11.06%	8.94% – 11.06%
Dhanlaxmi Bank	8.75% onwards	8.75% onwards	8.75% onwards
Tamilnad Mercantile Bank	8.60% – 9.80%	8.60% – 9.80%	8.60% – 9.80%
Bandhan Bank	8.91% – 15.00%	8.91% – 13.33%	8.91% – 13.33%
Housing Finance Companies (HFCs)
Repco Home Finance	9.60% onwards	9.60% onwards	9.60% onwards
GIC Housing Finance	8.80% onwards	8.80% onwards	8.80% onwards
ICICI Home Finance	9.30% onwards	9.30% onwards	9.30% onwards
Foreign Banks
HSBC India	8.40% onwards	8.40% onwards	8.40% onwards
Standard Chartered Bank	8.95% onwards	8.95% onwards	8.95% onwards

Note: Interest rates as of 18 March 2025

How to Calculate Interest on Home Loan

For calculating home loan interest component, banks and HFCs usually use the monthly reducing balance method. The interest is computed using this method on the principal amount that remains after each instalment mortgage payment. With a home loan, the interest component of the monthly interest payment (EMI) is highest during the first few years of the loan term and declines with each payment as the principal amount owed is paid off.

How to Calculate Housing Loan EMI

Individuals can calculate their home loan EMIs manually using the home loan EMI calculation formula,

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

However, as manual calculations are time-consuming and more prone to errors, individuals can save their efforts and time by using a home loan EMI calculator.

Anyone can use the calculator with ease and it is accurate, fast, and convenient. Users only need to enter a few loan details, like the loan amount, interest rate, and tenure, to calculate their EMI as well as the total amount payable and interest costs.

Also Read: How much home loan can I get based on my salary?

Tips to Reduce Home Loan Interest Rate

Those planning to avail home loans can try availing it at lower interest rates by following the tips below:

Keep your credit score as high as possible, preferably at least 700.
Apply for a joint home loan, preferably with a female member of the family as some lenders offer concessions on home loan interest rates to female applicants.
Existing home loan borrowers can lower their home loan rates by transferring their outstanding balance to another lender offering lower interest rates.
Many lenders set lower home loan interest rates for applicants having lower LTV ratios. Thus, applicants should make the maximum contribution possible towards home down payment so as to lower their loan amount, which thereby might help them get lower interest rates on their home loans.

5 Factors Determining Interest Rates of Home Loan

Since home loans are typically large-ticket items, banks and HFCs carefully consider the borrower’s credit history, ability to repay the loan, income, and property to be purchased, among other factors. Home loan applicants need to be thoroughly informed about their eligibility as well as the elements that lenders consider when reviewing their applications.

It needs to be noted that low interest rates usually come with strict home loan eligibility conditions. Here are the factors that lenders consider while determining your eligibility and the home loan interest rate offered:

1. Credit Score

Your credit score is a numerical representation of your credit history. People who have paid their EMIs and credit card bills in full, on time, and have not relied heavily on credit in the past are likely to have a good credit score.

If your credit score from CIBIL and other bureaus is 700 and above, lenders will look at you favourably for a home loan.
Also, banks and HFCs are using the credit score of home loan applicants to decide their home loan interest rates.
Since a high credit score reflects responsible credit behaviour and financial discipline, many banks and HFCs offer home loans at lower interest rates to applicants with high credit scores.
Those who have no or low credit scores can improve their credit scores by availing secured credit cards.

2. Home Loan Types

Home loan interest rates also differ as per the type of home loan. Regular home loans have standard rates while their counterparts such as Plot Loans or NRI Home Loans usually have higher interest rates.

3. Income and Employment

When evaluating your home loan eligibility, lenders also take into account your income, type of employment and your employer’s profile. Home loan applicants employed in government or public sector undertakings or working in large and/or reputed private sector organisations are usually preferred by lenders due to their higher job/income certainty.

Hence, lenders offer lower home loan interest rates to such applicants. On the other hand, home loan applicants with irregular or insufficient income might find it hard to get home loans at lower interest rates.

4. Loan Amount

The loan amount you wish to borrow can also affect the rate at which you get a home loan. Home loans of up to Rs 30 lakh usually have lower interest rates than home loans of higher amounts. To get a lower home loan interest rate, one should try to make the maximum possible down payment. This will not only reduce the overall loan burden but can also help them get a lower rate of interest on their loan.

5. Type of Home Loan Interest Rate

The type of interest rate you choose for your home loan will determine the rate at which you will repay your lender. In the case of fixed-rate home loans, EMIs remain the same for the entire loan period. Floating rates, on the other hand, change as per change in their lending rate such as Repo Linked Lending Rate (RLLR).

Lenders usually charge higher interest rates on home loans offered on fixed interest rates due to the higher interest rate risk involved with fixed-rate home loans.

Types of Home Loan Interest Rate

Depending on the interest rate, a home loan is of three types, fixed-rate, floating rate and hybrid.

Fixed Rate Loans

The fixed interest rate remains the same throughout the loan tenure, keeping the home loan EMI constant. It is better to apply for a home loan at a fixed interest rate when the current home loan interest rate is quite low and is expected to increase in the future.

Floating Rate Loans

Floating interest rate, also known as the variable rate of interest, is subject to the current market lending rates; and thus, they may change during the loan tenure. The home loan EMIs will increase or decrease as per the interest rate movement.

Hybrid Loans

Hybrid rate home loans are a mix of fixed-rate and floating rate home loans. These will initially have a fixed interest rate for a fixed period, after which it will convert into a floating interest rate. Such home loans are best suited for people who have taken a loan at a lower fixed rate and are planning to prepay or foreclose it before the floating rate kicks in.

Difference Between Fixed and Floating Interest Rate of Home Loan

Applicants must understand the key difference between fixed and floating home loan interest rates before submitting the applications.

Fixed Interest Rate	Floating Interest Rate
EMIs remain the same throughout the loan tenure regardless of the changes in the interest rate regime	EMIs change with the changes in the linked benchmark rates
Offers higher certainty in financial planning	Sudden increase in EMIs might derail the household finances of the borrowers
Better option when the current home loan interest rate is quite low and an upward trend is anticipated in the future	Better option when the current interest rates are quite high and a downward trend is predicted in the future
No benefit from the falling interest rate regime	Benefit from the lowered interest rate if the underlying benchmark rate decreases
Lenders charge higher rates as compared to floating rate home loans	Home loan interest rate offered on a floating rate is generally lower than that of housing loans availed at fixed interest rate
Lenders are free to levy charges on prepayments or foreclosure of fixed rate home loans	As per RBI’s guidelines, banks and HFCs are not allowed to levy prepayment and foreclosure charges on floating rate home loans disbursed to individuals

How can I lower my home loan interest rate?

Existing home loan borrowers can reduce their interest burden by transferring their outstanding loan amount to a new lender that offers them a lower interest rate and/or better terms. The lower interest rate will reduce their EMI and the overall interest cost. Balance transfer customers can also choose to reduce their loan tenure during the loan application process. One can also opt for a lower tenure during balance transfer to further reduce their overall interest cost.

However, it will also increase your loan EMIs. Hence, choose shorter tenures only when you are comfortable paying your revised housing loan EMI. Another way to reduce your interest burden could be by making part prepayments on your home loan whenever it’s feasible.

What is the difference between RLLR (Repo Linked Lending Rate) and MCLR (Marginal Cost of Lending Rate)?

RLLR is an external benchmark for setting interest rates for various loan products, which is directly linked to the repo rate set by the RBI’s Monetary Policy Committee. MCLR is an internal benchmark used for setting loan interest rates, which banks arrive at after considering their marginal cost of funds, negative carry on account of CRR, operating costs and tenor premium. As the RLLR is directly linked to the repo rate, the transmission of repo rate changes is the fastest in case of RLLR based loans. All floating rate retail and Micro & Small Enterprises (MSE) loans extended since October 1, 2019 and all floating rate loans extended to medium enterprises since April 1, 2020 are linked to external benchmarks like RLLR. For other loans, banks have the discretion to use external or internal benchmarks for setting their loan rates.

How to change your home loan interest rate from floating to fixed?

To switch from a floating rate home loan to a fixed rate home loan or vice-versa, borrowers would need to contact their lenders and request for rate conversion. This would also attract conversion fee and/or any other charges incidental to exercising the switchover. When making the switch, remember to check with the lender about how many times such switchovers are allowed during the loan tenure.

How to get the best home loan interest rate?

To get the best home loan interest rate, follow these tips

Maintain your credit scores of at least 700
Check for pre-approved offers from lenders with which you have deposit and/or loan and credit card account(s)
Visit online financial marketplaces like Paisabazaar to compare interest rates offered by other lenders and make higher home down payment as many lenders fix lower interest rates for applicants having lower LTV ratios.

FAQs on Home Loan Interest Rate

What is the current home loan interest rate?

The current home loan interest rates start from 8.10% p.a. depending on the lender and applicant’s credit profile.

Which bank offers the best home loan interest rate?

Union Bank of India, Bank of Maharashtra and Central Bank of India offer the lowest home loan interest rates starting from 8.10% p.a. For most consumers, the lender offering the best home loan interest rates will be the same as the lender offering the lowest home loan interest rate. However, lenders set home loan interest rates for their loan applicants based on their credit risk assessment.

Can a 9% home loan interest rate be considered good?

Considering the prevalent repo rate, a home loan interest rate of 9% can be considered good for those with a fairly good credit profile. However, those planning to avail home loans can visit online financial marketplaces like Paisabazaar to check whether they are eligible for lower home loan interest rates from other banks/HFCs. Similarly, existing home loan borrowers servicing interest rates at 9% or above can visit Paisabazaar to check and compare home loan interest rates offered by various banks/HFCs on exercising balance transfer.

Which bank offers the lowest home loan rate of interest for salaried and self-employed?

Union Bank of India, Bank of Maharashtra and Central Bank of India offer the lowest interest rates on home loans at 8.10% p.a. onwards, followed by Punjab National Bank, Bank of India, Bank of Baroda, Indian Overseas Bank, Canara Bank and Indian Bank, which offer home loans starting from 8.15% p.a. Next in the line are the State Bank of India, LIC Housing Finance and Bajaj Housing Finance, which offer home loans starting from 8.25% p.a.

How to check the total interest cost payable on the home loans?

Home loan applicants can use home loan EMI calculators to calculate the total interest cost payable on their home loan. They just need to enter their home loan amount, tenure and interest rates in these calculators to calculate the EMI and total interest cost of the housing loan.

What is the home loan interest rate offered by SBI?

SBI home loan interest rates start from 8.25% p.a.

Does RBI’s repo rate directly affect my home loan interest rate?

Floating rate home loans linked to repo rate as the external benchmark change in accordance to repo rate changes and their interest rate reset dates. Changes in repo rate would also affect home loan interest rates linked to internal benchmarks and other external benchmarks, with or without time lag, depending on various internal and market factors.

Can I switch from one bank to another to get a lower home loan interest rate?

Existing home loan borrowers can exercise home loan balance transfer facility to transfer the outstanding loan amount of their existing home loans to the new lender offering lower interest rates.

Which home loan interest rate is better – floating or fixed?

Some lenders offer home loans at fixed interest rates and those that offer fixed rate home loans charge higher interest rates. Moreover, as the home loan tenure is up to 30 years, a home loan borrower will experience several changes in the interest rate cycle during his loan tenure. This makes it difficult for any borrower to repay his home loan as per the interest rate cycle.

What is pre-EMI interest in Housing Loan?

Sometimes home loans are disbursed in instalments, depending on the stages of completion of the housing project. Until the final disbursement of the loan amount, borrowers may have to pay the cost of interest charged on the disbursed loan amount. This interest is known as pre-EMI interest. Pre-EMI interest is payable every month from the date of initial disbursement till the date of commencement of EMI.

What is the External Benchmarking based Lending Rate (EBLR)?

External benchmark-based lending rate (EBLR) is the reference rate used to determine the interest rates for loans based on external benchmarks like RBI’s repo rate, T-bill yields, etc. Before the introduction of EBLR, banks used to determine interest rates for their floating rate loans after considering internal factors like their cost of deposits, operating costs, cash reserve ratio, etc.

As per the RBI’s guidelines, all retail and MSME loans offered by banks on floating rates have to be linked to EBLR. The EBLR was introduced to quicken the transmission of policy or market interest rate changes to the borrowers.

Which other external benchmarks do banks use to set home loan interest rates?

Apart from the Reserve Bank of India’s policy repo rate, other external benchmarks that banks use to set home loan interest rates include:

Government of India 3-Months Treasury Bill yield published by the Financial Benchmarks India Private Ltd (FBIL)
Government of India 6-Months Treasury Bill yield published by the FBIL
Any other benchmark market interest rate published by the FBIL

How frequently would my EBLR-based home loan interest rates change during my home loan tenure?

The changes in the interest rates of your EBLR-based home loan would depend on the changes in the external benchmark rates used by your bank and the set frequency of their interest rate reset. RBI guidelines require banks to reset their EBLR-linked interest rates at least once in 3 months.

Does credit score affect home loan interest rate?

A higher credit score indicates higher creditworthiness, which reduces the credit risk for the lenders. This leads banks and HFCs, as part of their credit risk pricing policy, to charge home loan borrowers with lower spread and/or credit risk premium, resulting in lower interest rates.

Since a high credit score indicates financial discipline and regular repayment and thus reduces the credit risk for lenders, many banks charge lower credit risk premium from borrowers with high credit scores. This results in lower home loan interest rates for borrowers with high credit scores.

Can adding a co-applicant help me get a lower rate of interest on a Home Loan?

Yes, adding a female earning member of your family as a co-applicant can help you get a home loan at a lower interest rate. Lenders like Union Bank of India, Bank of India, Canara Bank, Central Bank of India, etc. offer interest concession of 0.05% to female applicants.

At what credit score can the applicants avail the best home loan interest rates?

Lenders usually offer lower home loan interest rates to applicants having credit scores of 700 and above. Some lenders also offer home loans to applicants having a credit score of less than 700 but at higher interest rates. Thus, prospective home loan applicants should try to improve/maintain their credit scores to 700 & above to avail home loan at the best possible interest rate based on their credit profile.

What will be the home loan interest rate for government employees?

Home loan interest rates, including for government employees, can vary widely depending on the lender and the credit profile of the applicant. Therefore, government employees should check and compare the interest rates offered by as many lenders as possible before applying for a home loan.

What is the difference between APR and interest rate?

Interest rate is a percentage of the loan amount charged by a lender from its borrower for availing the loan. On the other hand, Annual Percentage Rate (APR) of a loan is its annualised cost of borrowing, expressed in the form of percentage, and includes the interest cost as well as other associated costs like processing fees, documentation charges, etc. charged during loan origination.

How to get the lowest home loan interest rate in India?

The home loan interest rates offered to an individual may vary between different lenders, due to their varying cost of funds and credit risk assessment of their applicants. Hence, when looking for the lowest home loan rates, one should visit online financial marketplaces to compare home loan interest rates from multiple banks and HFCs.

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