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.The list of banks and their interest rate:
| Bank Name | Interest Rates | EMI Per Lac | Max Tenure |
|---|
| 
SBI | 8.60% to 8.75% | Rs. 758 | 30 Years |
| 
HDFC | 8.85% to 9.05% | Rs. 758 | 30 Years |
| 
ICICI Bank | 8.95% to 9.05% | Rs. 758 | 30 Years |
| 
Axis Bank | 8.80% to 9.00% | Rs. 758 | 30 Years |
| 
PNB Housing Finance | 8.50% to 10.25% | Rs. 769 | 30 Years |
| 
Bank of Baroda | 8.65% to 8.70% | Rs. 758 | 30 Years |
| 
LIC Housing Finance | 8.85% to 8.95% | Rs. 769 | 30 Years |
| 
Citibank | 8.50% to 8.60% | Rs. 805 | 25 Years |
| 
Standard Chartered Bank | 8.55% to 8.65% | Rs. 871 | 20 Years |
| 
DBS Bank | 8.60% to 8.85% | Rs. 874 | 20 Years |
| 
DHFL | 8.60% to 9.75% | Rs. 776 | 30 Years |
| 
Andhra Bank | 9.65% to 9.90% | Rs. 852 | 30 Years |
| 
South Indian Bank | 9.10% to 10.00% | Rs. 812 | 30 Years |
| 
Punjab and Sind Bank | 8.75% to 9.00% | Rs. 787 | 30 Years |
| 
PNB | 8.35% to 8.45% | Rs. 758 | 30 Years |
| 
Lakshmi Vilas Bank | 9.55% to 10.30% | Rs. 935 | 20 Years |
| 
Karnataka Bank | 9.50% to 13.95% | Rs. 841 | 30 Years |
| 
Indian Bank | 8.50% to 8.60% | Rs. 868 | 20 Years |
| 
GIC Housing Finance | 10.25% to 9.60% | Rs. 982 | 20 Years |
| 
IIFL | 8.50% to 9.60% | Rs. 769 | 30 Years |
| 
LT Housing Finance | 9.90% to 10.75% | Rs. 870 | 30 Years |
| 
Deutsche Bank | 9.45% to 9.65% | Rs. 929 | 20 Years |
| 
United Bank of India | 8.55% to 9.40% | Rs. 772 | 30 Years |
| 
Corporation Bank | 8.85% to 9.25% | Rs. 794 | 30 Years |
| 
Tamilnad Mercantile Bank | 10.30% to 10.80% | Rs. 900 | 30 Years |
| 
Catholic Syrian Bank | 10.10% to 10.50% | Rs. 972 | 20 Years |
| 
Bank of India | 8.65% to 8.70% | Rs. 780 | 30 Years |
| 
State Bank of Patiala | 9.30% to 9.65% | Rs. 826 | 30 Years |
| 
Allahabad Bank | 8.50% to 9.00% | Rs. 868 | 20 Years |
| 
Reliance Capital | 10.00% to 11.75% | Rs. 878 | 30 Years |
| 
OBC | 8.45% to 8.55% | Rs. 802 | 25 Years |
| 
Kotak Bank | 8.60% to 9.65% | Rs. 874 | 20 Years |
| 
Jammu And Kashmir Bank | 8.65% to 9.00% | Rs. 994 | 15 Years |
| 
IDBI Bank | 8.35% to 8.65% | Rs. 758 | 30 Years |
| 
Federal Bank | 9.00% to 9.25% | Rs. 805 | 30 Years |
| 
IDFC Bank | 8.55% to 8.85% | Rs. 772 | 30 Years |
| 
Dhan Laxmi Bank | 10.10% to 10.35% | Rs. 972 | 20 Years |
| 
State Bank of Hyderabad | 8.85% to 9.65% | Rs. 794 | 30 Years |
| 
Dena Bank | 8.25% to 8.80% | Rs. 745 | 25 Years |
| 
Union Bank of India | 8.30% to 8.35% | Rs. 755 | 30 Years |
| 
City Union Bank | 9.90% to 11.60% | Rs. 1,068 | 15 Years |
| 
Canara Bank | 8.65% to 8.75% | Rs. 780 | 30 Years |
| 
Syndicate Bank | 8.75% to 9.65% | Rs. 787 | 30 Years |
| 
State Bank of Mysore | 8.80% to 9.50% | Rs. 790 | 30 Years |
| 
Indiabulls | 8.35% to 8.85% | Rs. 758 | 30 Years |
| 
RBL Bank | 10.30% to 11.65% | Rs. 930 | 25 Years |
| 
Karur Vysya Bank | 9.10% to 10.05% | Rs. 846 | 25 Years |
| 
Indian Overseas Bank | 8.65% to 9.15% | Rs. 780 | 30 Years |
| 
HSBC Bank | 8.65% to 8.40% | Rs. 815 | 25 Years |
| 
Yes Bank | 9.35% to 10.50% | Rs. 863 | 25 Years |
| 
Edelweiss | 10.50% to 10.90% | Rs. 944 | 25 Years |
| 
Repco Home Finance | 9.60% to 11.50% | Rs. 939 | 20 Years |
| 
Development Credit Bank | 10.48% to 11.35% | Rs. 997 | 20 Years |
| 
Vijaya Bank | 8.65% to 9.45% | Rs. 780 | 30 Years |
| 
UCO Bank | 8.55% to 8.80% | Rs. 772 | 30 Years |
| 
Central Bank of India | 8.50% to 9.50% | Rs. 769 | 30 Years |
| 
Bank of Maharashtra | 8.70% to 8.80% | Rs. 783 | 30 Years |
| 
State Bank of Travancore | 9.20% to 9.45% | Rs. 819 | 30 Years |