Home Loan Interest Rates

What is Home Loan Interest Rate?

Home Loans have become the best medium to buy homes. Banks and NBFCs offer various home loan schemes and alluring interest rates that attract the home buyer. The key deciding factor for a customer to avail home loan from a particular financial institution is determined by the interest rate. The interest rate is charged on the principal loan amount. 

What determines interest rates on your Home Loan?

It is the bank that decides their lending rates. This depends on their cost of funds and NIM or Net Interest Margin which the banks need to earn to earn a profit and cover their operation cost.

An important point to note here is that home loans to salaried employees are offered at a lower rate as compared to those who are working in the unorganized sector; the prime reason for this is the stability of income of salaried employees.

The home loan interest rates calculation by the nationalized banks is presently based on MCLR or Marginal Cost of Lending Rate method. To this rate, the spread is added and then the final interest rate is mentioned to the customers or borrowers. And the NBFCs use Prime Lending Rate (PLR) calculation method.

Types of Home Loan Interest Rates

There are two kinds of home loan interest rates:

  • Fixed Interest Rate Loan-   This rate of interest remains fixed and the borrower has to pay a fixed EMI during the home loan tenure. The market fluctuations don’t impact the home loan rate. A major point of concern when it comes to fixed home loan rates is they are 1-2.5% higher than the floating rate of interest. If a borrower has fixed home loan then he/she doesn’t get the benefit if the home loan rates go down. Their EMI remains unaffected by it.
  • Floating Interest Rate Loan–  As the name indicates, floating rate loans have interest rates that change with the market condition. The are highly susceptible to market fluctuations. If the base rate changes, the floating rate also gets changed along with it. They are usually cheaper than the fixed rates but being highly influenced by the market condition they may vary as the RBI changes the rates.

Factors affecting home loan  
interest rate

  •    home-loan-interest-rates_loanyantra-comIncome
  •    Credit score
  •    Location of the property
  •    Loan amount
  •    Type of loan
  •    Loan tenure
  •    Type of interest rate
  •    Employment type
  •    On-going promo offers

All the banks and HFCs offer lucrative and competitive interest rate on the home loan, here is

The list of banks and HFCs and their interest rate.  

Banks and HFCs associated with Loanyantra Home Loan Interest Rate Range
SBI 8.50% – 9.10%
ICICI 8.65% – 10.10%
HDFC 8.65% – 9.25%
DHFL 9.00% – 10.00%
Indiabulls 8.65% – 12.25%
Standard Charted Bank 9.25% – 9.4%
Aditya Birla Housing Finance 8.65% -8.89%
IDBI 9.35%
Axis 9.15%-9.35%
CITI 8.8%- 9.55%
HSBC 8.85%-10.4%
Banks and HFCs not associated with Loanyantra Interest Rate
PNB Housing Finance 8.9% – 9.6%
LIC Housing Finance 8.5%
Kotak Bank 8.75%
Edelweiss 10.5%-10.9%
Reliance Capital 10%-11.75%
Bank of Baroda 9.6%
Indian Bank 9.65%
Dena Bank 9.6% – 9.85%
Bank of India 8.6% – 8.75%
Federal Bank 9.6%
Union Bank of India 8.8%
Allahabad Bank 8.7%-9.25%
Bank of India 8.65%-8.7%
Bank of Maharashtra 8.75% – 8.85%
Canara Bank 9.15%-9.70%

Discount on home loan interest rates by LOANYANTRA

Loanyantra is a one stop shop for all kind of home loan services. You process your loan with us and get 0.10% discount on the interest rate for one year. Also, manage your loan by the services provided by loanyantra. Get door-step service for the collection of documents and submitting them. Get updates about the process till disbursal. Our first priority is to understand our customer profile and then suggest them the best home loan which will match their requirement perfectly.  Get connected with us today to know more about home loans.