Home loans are a long-term investment, a huge investment that guarantees the borrower will repay the loan amount with interest. The strict eligibility parameters ensure that the funds are provided to the right person and that the borrower does not feel burdened by paying off the EMI.
Before applying for a Home Loan, one needs to calculate the EMI, i.e., the Equivalence Monthly Installments associated with the loan. The EMI Calculator helps calculate the EMI amount, repayment tenure, rate of interest, and many other factors. Whether it is a 5 Lakh Home Loan EMI or a 20 Lakh Home Loan EMI, the same can be calculated using an EMI calculator.
Different Types of Home Loans Interest Rates
There are three different types of Home loan interest rates: fixed, Floating, and Hybrid. Each has its own unique features and benefits.
- Fixed Interest Rate: This means a rate that remains consistent throughout the loan tenure, leading to a steady home loan EMI. If a low rate of interest is expected to have an upward trend, it is preferred to apply for a fixed rate of interest.
- Floating Interest Rate: This rate is subject to current market lending rates, which fluctuate during the loan’s tenure. The EMI amount may increase or decrease with respect to the change in interest rate.
- Hybrid Interest Rate: It is a combination of fixed and fluctuating interest rates. It will bear a fixed rate of interest for a specified period before switching to the fluctuating interest rate. This interest rate is best suited for those who want to get a home loan at a lower fixed rate and want to make a prepayment or foreclose the loan before the floating rate starts.
Fixed Vs. Floating Interest Rates in the Case of Home Loans
| Fixed Interest Rate | Floating Interest Rate |
| Here, the EMI amount remains the same during the tenure of the loan, irrespective of any changes in the interest rate mechanism | Here, the EMI amount changes with the changes in the linked benchmark rates |
| It provides a high certainty level for financial planning. | A sudden increase in EMIs might distract the household finances of the borrowers. |
| It is considered to be a better option in case the present rate of interest is quite low and an upward trend is predicted in the future | It is considered to be a better option in case the present rate of interest is quite high and a downward trend is anticipated in the future |
| There is no benefit from the falling interest rate mechanism | One can benefit from the low-interest rate in case the underlying benchmark rate decreases |
| Lenders charge higher rates as compared to floating-rate home loans | The interest rate is generally lower than that of housing loans availed at a fixed rate of interest |
| The lenders can levy charges on prepayments or foreclosure | As per the guidelines of RBI, banks and Housing Finance Companies cannot levy prepayment or foreclosure charges |
Home Loan Interest Rates of All Banks
Here is a list of Home Loan Interest Rate All Bank:
- Private Sector Banks
| Name of Lender | Current Home Loan Interest Rate |
| Axis Bank | 8.75% – 12.70% |
| Karur Vysya Bank | 9.23% – 12.13% |
| Karnataka Bank | 9.26% – 10.53% |
| ICICI Bank | 9.00% – 10.05% |
| Tamilnad Mercantile Bank | 9.10% – 9.60% |
| Kotak Mahindra Bank | 8.85% onwards |
| Bandhan Bank | 9.15% – 15.00% |
| Federal Bank | 10.15% – 10.30% |
| South Indian Bank | 9.85% – 12.60% |
| RBL Bank | 9.15% – 11.55% |
| Dhanlaxmi Bank | 9.35% – 10.50% |
- Public Sector Banks
| Name of Lender | Rate |
| Punjab & Sind Bank | 8.85% – 9.95% |
| Punjab National Bank | 8.65% – 9.50% |
| State Bank of India | 9.15% – 10.15% |
| Indian Overseas Bank | 9.55% – 10.95% |
| Bank of India | 9.25% – 10.75% |
| UCO Bank | 8.45% – 10.30% |
| Bank of Maharashtra | 8.40% – 10.65% |
| Canara Bank | 8.85%- 11.25% |
| Bank of Baroda | 9.15% – 10.65% |
| Indian Bank | 8.45% – 10.40% |
| Union Bank of India | 9.00% – 10.75% |
- Foreign Banks
| Name of Lender | Housing Loan Interest Rate |
| Citibank | 8.45% onwards |
| Standard Chartered | 8.75% onwards |
| HSBC | 8.60% onwards |
How to Apply for a Home Loan?
1: Home Loan Application Form:
The initial requirement of the loan application process is to fill out the loan application form, which comprises the below-mentioned details:
- Personal Information of Applicant (Name, Phone Number, etc.)
- Monthly Income of the applicant
- Residential or current address
- Educational Background
- Details of Current and Previous Background
- Details of the property for which the loan is to be applied
- Estimated cost of the property
- The current financing method
2: Verification and Processing:
Once the form and documents are submitted, the bank will start processing the loan. The bank then investigates the credit score, so it is always advised to keep a good credit history. It is also recommended that all the information be submitted correctly and accurately during the loan application process. If the information is found false, the home loan application will be rejected.
3: Loan Sanction:
The bank will then verify the documents provided to process the loan application. If the paperwork is found correct after the verification, it will normally take 1-2 days or even less. In some cases, the bank may ask the applicant to visit in person for verification purposes before providing approval on the loan.
4: Technical and Legal Check:
Before the loan is disbursed, the bank undertakes legal and technical inspections. For example, bank representatives verify the property for which the loan is requested. If the property is under construction, the bank representatives inspect the construction progress and work quality. While performing the technical check, they analyse the actual value of the property. Also, they consider the status of the property, i.e., under construction or for sale. In case of a resale, the bank will check for the age of the property and may additionally investigate if the property has been mortgaged earlier. The ownership rights of the property will also be investigated to check if there is any conflicting information in the documents.
5: Payment of Loan Processing Fees:
Once the paperwork and legal check are completed, the applicant is required to pay the bank the home loan processing fees. The processing fees range from 0.25% to 0.50% of the loan amount.
6: Disbursal of Loan Amount:
Once all the eligibility parameters are met, an agreement letter will be sent to the applicant, following which the loan will be disbursed to the applicant’s bank account. Also, a complete home loan schedule will be sent to the applicant’s registered e-mail address.