With home loan interest rates fluctuating in response to economic policies and market conditions, prospective borrowers must carefully evaluate their home loan options. In 2025, home loan interest rates start as low as 8.10% p.a., but the final rate depends on various factors, including the applicant’s credit score, income stability, and lender policies.
Here’s a comprehensive comparison of home loan interest rates across all major banks and financial institutions, ensuring that borrowers make well-informed financial decisions.
Home Loan Interest Rates by RBI Approved Nationalized Banks
| RBI Approved Nationalized Banks | Interest Rates | Processing Fees |
|---|---|---|
| Bank of Baroda | 8.40% p.a. onwards | 100% waiver in Processing charges |
| Bank of India | 8.35% p.a. onwards | 0.25% of Loan amount + GSTMin. ₹1,500 to Max. ₹20,000 |
| Bank of Maharashtra | 8.10% p.a. onwards | No processing fees |
| Canara Bank | 8.40% p.a. onwards | 0.50% (Min Rs.1500/- +GST and Max. Rs.10,000/- +GST) |
| Central Bank of India | 8.25% p.a. onwards | 0.50% up to Rs.20,000 + GST (Waived up to 31.03.2025) |
| Indian Bank | 8.15% p.a. onwards | 0.25% of the loan amount + GST |
| Indian Overseas Bank | 8.25% p.a. onwards | Processing charges on home loans are waived off until 31.03.2025 |
| Punjab & Sind Bank | 8.35% p.a. onwards | 0.15%–0.25% of the loan amount + GST |
| Punjab National Bank | 8.50% p.a. onwards | up to 1% for Home Loan |
| State Bank of India | 8.50% p.a. onwards | 0.35% of the loan amount |
| UCO Bank | 8.35% p.a. onwards | 0.5% of the loan amount, minimum Rs.1500/- & maximum Rs. 15000/- |
| Union Bank of India | 8.60% p.a. onwards | 0.50% (Max. Rs.15,000/- +GST) |
Home Loan Interest Rates by RBI Approved Private Banks
| RBI Approved Private Banks | Interest Rates | Processing Fees |
|---|---|---|
| Axis Bank Ltd. | 8.75% p.a. onwards | 1% of the loan amount + GST or a minimum of Rs 10,000 |
| Bandhan Bank Ltd. | 9.16% p.a. onwards | NIL to 1.00% depending on scheme + GST |
| CSB Bank Limited | 9.1% p.a. onwards | 0.50% of the loan amount + GST |
| City Union Bank Ltd. | 8.25% p.a. onwards | 0.35% on the loan amount plusGST |
| DCB Bank Ltd. | 9.75% p.a. onwards | Up to 2% or ₹ 5,000 (whichever is higher) |
| Dhanlaxmi Bank Ltd. | 8.75% p.a. onwards | 1.00% of the loan amount |
| Federal Bank Ltd. | 8.80% p.a. onwards | Low processing fees |
| HDFC Bank Ltd. | 8.75% p.a. onwards | Up to 0.50% of the loan amount or Rs. 3300/- whichever is higher |
| ICICI Bank Ltd. | 8.75% p.a. onwards | 0.50% of the loan amount, plus applicable taxes. |
| IndusInd Bank Ltd. | 8.35% p.a. onwards | Up to 1% of the Loan Amount |
| IDFC FIRST Bank Limited | 8.85% p.a. onwards | Up to 3% of loan amount |
| Jammu & Kashmir Bank Ltd. | 8.85% p.a. onwards | 0.25% of Loan amount + GST |
| Karnataka Bank Ltd. | 8.60% p.a. onwards | Contact the bank |
| Karur Vysya Bank Ltd. | 8.75% p.a. onwards | Rs.2,500/ – Rs.7500/ + GST |
| Kotak Mahindra Bank Ltd. | 8.75% p.a. onwards | 0.5 % processing fee for salaried and 1 % for self-employed + GST |
| Nainital Bank Ltd. | 8.40% p.a. onwards | 0.50% (Minimum Rs. 500/- & Max. Rs10000/- |
| RBL Bank Ltd. | 9.00% p.a. onwards | Up to 1.5% of the loan amount or up to Rs 15,000 |
| South Indian Bank Ltd. | 8.70% p.a. onwards | 0.50% +GST of the loan amount |
| Tamilnad Mercantile Bank Ltd. | 9.75% p.a. onwards | 0.50% of the Limit Sanctioned plus GST |
| YES Bank Ltd. | 9.00% p.a. onwards | 1.5% of the loan amount or Rs. 10000 whichever is higher + GST |
| IDBI Bank Limited | 8.50% p.a. onwards | 0.50% of loan amount (Plus applicable taxes) |
Home Loan Interest Rates by RBI Approved HFCs
| RBI Approved HFCs | Interest Rates | Processing Fees |
|---|---|---|
| LIC Housing Finance Limited | 8.50% p.a. onwards | up to 0.50% of the loan amount + GST |
| Housing and Urban Development Corporation Limited | 8.95% p.a. onwards | 0.25% of the loan amount |
| Piramal Capital & Housing Finance Limited | 9.49% p.a. onwards | Up to 5% of loan amount + applicable taxes |
| Bajaj Housing Finance Limited | 8.55% p.a. onwards | Up to 4% of the loan amount |
| PNB Housing Finance Ltd | 8.50% p.a. onwards | Up to 1% of the loan amount |
| Tata Capital Housing Finance Limited | 8.75% p.a. onwards | Up to 3% of loan amount+ GST |
| Can Fin Homes Limited | 9.60% p.a. onwards | 0.75% + GST of loan amount(Minimum: Rs.5000/- +GST) |
| IIFL Home Finance Limited | 8.75% p.a. onwards | Up to 1.75% of the loan amount |
| ICICI Home Finance Company Limited | Contact the bank | 0.75% of the loan amount or ₹ 11,000, whichever is higher |
| Aadhar Housing Finance Limited | 11.75% p.a. onwards | Contact the Bank |
| Aditya Birla Housing Finance Limited | 8.60% p.a. onwards | 1% of the loan amount |
| Aavas Financiers Limited | 9.00% p.a. onwards | 1% of the loan amount |
| Repco Home Finance Limited | 8.25% p.a. onwards | 1% of the loan amount |
| Sundaram Home Finance Limited | 10.10% p.a. onwards | ₹3,000 + GST |
| Shriram Housing Finance Limited | 9.50% p.a. onwards | Up to 2.5% of loan amount |
| GIC Housing Finance Limited | 8.80% p.a. onwards | ₹4,500 + GST |
| Hinduja Housing Finance Limited | 10.15% p.a. onwards | ₹5,999 + GST(Including Technical Fees) |
| Home First Finance Company India Limited | Contact the Bank | ₹2500 + GST |
| SMFG India Home Finance Company Limited | 10.00% p.a. onwards | Up to 3% of the home loan |
| Mahindra Rural Housing Finance Limited | Contact the Bank | 0.2% – 2% of the loan amount |
| Grihum Housing Finance Limited | 11.00% p.a. onwards | 0.50% of the loan amount + GST |
| Vastu Housing Finance Corporation Limited | 12.50% p.a. onwards | Up to 3% of the home loan amount |
| Aptus Value Housing Finance India Limited | 14.00% p.a. onwards | Rs. 3,500 + GST |
| Godrej Housing Finance Limited | 8.55% p.a. onwards | Contact the Bank |
| India Shelter Finance Corporation Limited | 13.00% p.a. onwards | Contact the Bank |
| Hero Housing Finance Limited | 9.50% p.a. onwards | ₹5000 + GST |
| Shubham Housing Development Finance Company Limited | 9.90% p.a. onwards | 3% of the loan amount |
| Motilal Oswal Home Finance Limited | 11.75% p.a. onwards | Up to Rs 10,000 |
| Capri Global Housing Finance Limited | Contact the Bank | ₹2000 + GST |
| Nido Home Finance Limited | Contact the Bank | 2% of the loan amount |
| Muthoot Housing Finance Company Limited | 11.00% p.a. onwards | 1.25% of the loan amount |
| IndoStar Home Finance Private Limited | 9.50% p.a. onwards | Up to 3% of Loan amount orINR 2,500 whichever is higher |
| JM Financial Home Loans Limited | 10.00% p.a. onwards | Rs. 5999 + GST |
| Svatantra Micro Housing Finance Corporation Limited | 14.75% p.a. onwards | 2% – 3% of the loan amount |
| Muthoot Homefin (India) Limited | 12.25% p.a. onwards | 1.25% of the loan amount |
| Aviom India Housing Finance Private Limited | Contact the Bank | Contact the Bank |
| DMI Housing Finance Private Limited | 8.99% p.a. onwards | ₹3000 + GST |
| Wonder Home Finance Limited | 10.80% p.a. onwards | Maximum 3% + GST, of the Loan amount sanctioned + Other Applicable Charges |
| Manappuram Home Finance Limited | 12.00% p.a. onwards | 2.5% plus Applicable Tax |
| Cent Bank Home Finance Limited | 9.65% p.a. onwards | As per sanction terms |
| Ummeed Housing Finance Private Limited | 12.99% p.a. onwards | Up to 1% |
| Centrum Housing Finance Limited | 11.00% p.a. onwards | 1% of the SanctionedLoan Amount +applicable taxes |
| SEWA Grih Rin Limited | 18.00% p.a. onwards | 2 % for sanction amount |
| IKF Home Finance Limited | 12.25% p.a. onwards | Rs.4000 to Rs.5000 + applicable taxes |
| KIFS Housing Finance Limited | 11.75% p.a. onwards | 0.25 % to 0.50 % of the requested loan amount |
| Tyger Home Finance Pvt. Ltd. | 12.00% p.a. onwards | Contact the Bank |
| Altum Credo Home Finance Private Limited | 14.00% p.a. onwards | 1.00% of Sanctioned Loan Amount (+ applicable taxes) |
| Roha Housing Finance Private Limited | 10.00% p.a. onwards | Contact the Bank |
| Satin Housing Finance Limited | 9.00% p.a. onwards | Contact the Bank |
| SRG Housing Finance Limited | 15.00% p.a. onwards | Up to 3% + applicable taxes (on the sanctioned value) |
| Nivara Home Finance Limited | 8.25% p.a. onwards | 2.25% plus applicable taxes |
| Supreme Housing Finance Limited | 10.00% p.a. onwards | Up to 5 % + GST |
| Manipal Housing Finance Syndicate Limited | Please contact nearest branch | Please contact nearest branch |
| MAS Rural Housing & Mortgage Finance Limited | 10.50% p.a. onwards | 1% – 2.75% of loan amount subject to minimum Rs. 5000/- Plusapplicable taxes |
| ART Housing Finance (India) Limited | Contact the Bank | Contact the Bank |
| Star Housing Finance Limited | Please contact nearest branch | 2% + GST (on the sanctioned value) |
| Capital India Home Loans Limited | 11.00% p.a. onwards | Up to 4.00% of the loan amount |
| Easy Home Finance Limited | 11.00% p.a. onwards | Up to Rs. 5,000/- |
| Fasttrack Housing Finance Limited | Please contact nearest branch | Please contact nearest branch |
| IFL Housing Finance Limited | 12.00% p.a. onwards | 0 – 2.5% PLUS APPLICABLE TAXES OF SANCTION AMOUNT |
| Agrim Housing Finance Private Limited | 12.00% p.a. onwards | 0.25 to 3% of Loan Amount + GST |
| Mentor Home Loans India Limited | 15.00% p.a. onwards | Up to 3.5% + GST |
| Religare Housing Development Finance Corporation Limited | 12.00% p.a. onwards | Up to 3.5% of the loan amount sanctioned |
| Vridhi Finserv Home Finance Limited | Please contact nearest branch | Up to 3% of the loan amount sanctioned |
| Khush Housing Finance Private Limited | Please contact nearest branch | 2% of the loan amount sanctioned + GST |
| Manibhavnam Home Finance India Private Limited | 13.00% p.a. onwards | Up to 3.5% of the loan amount applied plus taxes |
| Varashakti Housing Finance Private Limited | 12.00% p.a. onwards | 2.50% of the loan amount + applicable GST |
| Save Housing Finance Limited | 14.50% p.a. onwards | 0.5% to 2% of the loan amount sanctioned + GST |
| Unico Housing Finance Private Limited | 10.00% p.a. onwards | Up to 2% of loan amount + GST |
| Sasvitha Home Finance Limited | 13.50% p.a. onwards | 1.5% + GST |
| Satya Micro Housing Finance Private Limited | 10.00% p.a. onwards | 1%- + GST |
| West End Housing Finance Limited | 10.00% p.a. onwards | Up to 3% of the loan amount sanctioned |
| India Home Loan Limited | 12.00% p.a. onwards | Please contact nearest branch |
| Sahara Housing Finance Corporation Limited | 8.75% p.a. onwards | 1% – 1.25% plus applicable GST |
Home Loan Interest Rates by RBI Approved Small Finance Banks
| RBI Approved Small Finance Banks | Interest Rates | Processing Fees |
|---|---|---|
| Au Small Finance Bank Ltd. | 11.00% p.a. onwards | Up to 2% of the Loan Amount |
| Capital Small Finance Bank Ltd | 9.25% p.a. onwards | 0.50% on the loan amount |
| Equitas Small Finance Bank Ltd | 10.50% p.a. onwards | Up to 2% on the sanctioned home loan |
| ESAF Small Finance Bank Ltd. | Contact the bank | Contact the bank |
| Suryoday Small Finance Bank Ltd. | 10.00% p.a. onwards | Up to 2% of the loan amount |
| Ujjivan Small Finance Bank Ltd. | 8.75% p.a. onwards | ₹3,350 + GST applicable |
| Utkarsh Small Finance Bank Ltd. | 11.00% p.a. onwards | 0.50% of the loan amount |
| North East Small Finance Bank Ltd | 9.50% p.a. onwards | 2% of the loan amount |
| Jana Small Finance Bank Ltd | 9.75% p.a. onwards | 0.5% – 2% of the loan amount |
| Shivalik Small Finance Bank Ltd | Contact the bank | 1% of the loan amount(Minimum: ₹1,500 + GST applicable) |
| Unity Small Finance Bank Ltd | Does not offer home loans |
Types of Home Loan Interest Rates
When considering a home loan, it’s essential to understand the various interest rate structures available, as they directly influence your monthly payments and the total cost of the loan. Below are the primary types of home loan interest rates:
1. Fixed Interest Rates
| Aspects | Description |
|---|---|
| What are fixed home loan interest rates? | A fixed interest rate remains constant throughout the loan tenure, ensuring that the Equated Monthly Installments (EMIs) do not change over time. |
| How does fixed home loan interest rate work? | The interest rate is agreed upon at the inception of the loan and does not fluctuate with market conditions or benchmark rates. |
| Influence of fixed home loan interest rates on EMIs | EMIs remain consistent, providing predictability in monthly financial planning. |
| Influence of fixed home loan interest rates on total loan cost | Since the rate is fixed, the total interest paid over the loan period is predetermined. (However, fixed rates are typically 1% to 2.5% higher than floating rates, potentially leading to a higher overall cost.) |
| Impact of fixed home loan interest rates on prepayment/ foreclosure | Fixed-rate loans often come with prepayment penalties, making early repayment or foreclosure more expensive. |
| Who should consider fixed home loan interest rates? | Borrowers seeking stability and predictability in their repayments, especially when anticipating a rise in interest rates, may prefer fixed-rate loans. |
2. Floating Interest Rates
| Aspects | Description |
|---|---|
| What are floating home loan interest rates? | A floating interest rate fluctuates based on changes in the lender’s benchmark rate, which is influenced by market conditions and monetary policies. |
| How does floating home loan interest rate work? | The interest rate is tied to a reference rate (e.g., the lender’s base rate or the Reserve Bank of India’s repo rate) and adjusts periodically. |
| Influence of floating home loan interest rates on EMIs | EMIs can increase or decrease over time, reflecting the movements in the benchmark rate. |
| Influence of floating home loan interest rates on total loan cost | Floating rates are generally lower than fixed rates initially, which can reduce the total interest paid if market rates remain stable or decline. |
| Impact of floating home loan interest rates on prepayment/ foreclosure | Typically, there are no prepayment penalties for floating-rate loans (If paid through your own funds) |
| Who should consider floating home loan interest rates? | Borrowers who anticipate stable or declining interest rates and are comfortable with potential fluctuations in EMIs may find floating-rate loans advantageous. |
3. Hybrid Home Loan Interest Rates
| Aspects | Description |
|---|---|
| What are hybrid home loan interest rates? | A hybrid interest rate combines elements of both fixed and floating rates, starting with a fixed rate for an initial period before transitioning to a floating rate. |
| How does hybrid home loan interest rate work? | The loan begins with a fixed interest rate for a specified period (e.g., the first 3-5 years), after which it switches to a floating rate for the remaining tenure. |
| Influence of hybrid home loan interest rates on EMIs | EMIs remain constant during the fixed-rate period and may vary during the floating-rate period, depending on market conditions. |
| Influence of hybrid home loan interest rates on total loan cost | The overall cost depends on the interest rates during both periods. If market rates rise after the fixed period, the total cost may increase; if they fall, the borrower could benefit from lower interest expenses. |
| Impact of hybrid home loan interest rates on prepayment/ foreclosure | Prepayment terms can vary; some lenders may impose penalties during the fixed-rate period but allow penalty-free prepayments during the floating-rate phase. |
| Who should consider hybrid home loan interest rates? | Borrowers seeking initial payment stability with the flexibility to benefit from potential future rate decreases might opt for hybrid loans |
Fixed vs. Floating vs. Hybrid Home Loan Interest Rates
| Aspects | Fixed Interest Rates | Floating Interest Rates | Hybrid Interest Rates |
|---|---|---|---|
| Rate Behavior | Constant throughout the loan tenure. | Changes based on market conditions. | Fixed initially, then shifts to floating. |
| Market Impact | Unaffected by rate fluctuations. | Directly impacted by market rates. | Partially affected—safe initially, market-driven later. |
| EMI Stability | Fixed EMIs, easy budgeting. | EMIs vary based on interest rates. | Fixed EMIs for a set period, then variable. |
| Total Loan Cost | Higher but predictable. | Can be lower if rates drop but riskier if they rise. | Mixed—depends on post-fixed phase rates. |
| Prepayment | May have penalties. | Usually no penalties. | Penalties in fixed phase, none in floating. |
| Best For | Stability seekers. | Risk-takers aiming for potential savings. | Those needing initial stability with later flexibility. |
Suggested Read: Comparing Lending Rates – RLLR vs. MCLR vs. PLR
How is Home Loan Interest Rate Calculated?
When you apply for a home loan, Indian lenders assess several key factors from your financial profile. These factors help determine how much risk you pose as a borrower. A stronger profile can secure you the lowest interest rate in the home loan market of 8.10% p.a. or even slightly lower, whereas certain risks can lead to higher rates.
Here’s how it is determined:
1. Credit Score
Impact: Your credit score is the most critical factor. A high score indicates reliability, which often translates to lower rates.
Rate Adjustments:
| Credit Score Range | Adjustments |
|---|---|
| 800+ | Qualify for the base rate or slightly lower* |
| 650–700 | Increase by approximately +0.5–1.5% |
| Below 650 | Increase by approximately +2–3% (or possible denial) |
2. Income Stability
- Impact: Regular, stable income (e.g., salaried employment) reduces lender risk.
| Applicant Type | Rate Details |
|---|---|
| Salaried Applicants | Standard Base Rate |
| Freelancers or Variable Income Earners | Standard Base Rate + Additional 0.25–0.75% |
3. Debt-to-Income Ratio (DTI)
DTI ratio compares your monthly debt payments to your monthly income. A lower DTI suggests that you have a balanced financial profile, reducing the likelihood of default and often resulting in a better interest rate.
DTI = [monthly debt payments/gross monthly payments] x 100
Thresholds:
| Debt-to-Income (DTI) Ratio | Rate Impact |
|---|---|
| DTI < 36% | Access to the best rates |
| DTI 36–43% | May see an increase of +0.25–0.5% |
| DTI > 43% | Likely to face higher rates or stricter scrutiny |
4. Loan-to-Value Ratio (LTV)
Your down payment plays a crucial role in determining the LTV ratio. A larger down payment decreases the LTV, signaling to lenders that you’re less likely to default, which may earn you a lower interest rate.
LTV = [Loan Amount/ Property Value] x 100
Impact:
| Loan-to-Value (LTV) Ratio | Rate Impact |
|---|---|
| LTV < 80% | Often qualifies for preferential rates |
| LTV > 90% | Typically results in an increase of +0.3–0.8% |
How is Home Loan EMI Calculated?
The EMI for a home loan is calculated using the following standard formula:
EMI = [P x R x (1+R)^N] / [(1+R)^N – 1]
- P = Loan Amount
- R = Monthly Interest Rate (Annual Rate ÷ 12)
- N = Loan Tenure in Months
Example:
If you borrow ₹50 lakhs at an interest rate of 8.5% p.a. for a tenure of 20 years, the calculation will be:
- Loan Amount (P) = ₹50,00,000
- Interest Rate (R) = 8.5%/12 = 0.7083% per month
- Loan Tenure (N) = 20 years × 12 = 240 months
Using the EMI formula, the monthly EMI will be around ₹43,391.
Sample EMI Calculations for a Rs 50 Lakh Home Loan @8.40% p.a.
| Tenure (Years) | Interest Rate | Monthly EMI | Total Interest |
|---|---|---|---|
| 20 | 8.40% | ₹43,391 | ₹54,13,840 |
| 25 | 8.40% | ₹39,133 | ₹67,39,900 |
| 30 | 8.40% | ₹36,829 | ₹82,58,440 |
Check Out: Home Loan EMI Calculator
Factors Affecting Home Loan Interest Rates
Various economic, financial, and personal factors influence home loan interest rates, impacting affordability and repayment terms. Here are the factors that affect your home loan interest rates:
| Factors | Impact on Interest Rate |
|---|---|
| Repo Rate | Higher repo rate → Higher home loan rates [Vice Versa] |
| Credit Score | Higher score (750+) → Lower interest rate [Vice Versa] |
| Loan Amount | Higher loan amount → May attract a higher rate [Vice Versa] |
| Loan Tenure | Longer tenure → Generally higher interest [Vice Versa] |
| Lender’s Policy | Banks/NBFCs set rates based on risk & competition |
| Employment Type | Salaried (stable income) → Lower ratesSelf-employed → Higher rates |
| Income Level | Higher income → Lower rate due to reduced default risk[Vice Versa] |
| Property Location | Prime locations → Lower risk and better rates [Vice Versa] |
| Type of Interest Rate | Fixed rate → Higher initiallyFloating rate → Varies with market |
| Government Schemes | PMAY, CLSS, and other subsidies offer reduced interest rates |
| Loan-to-Value Ratio (LTV) | higher down payment → Lower interest rate [Vice Versa] |
How to Negotiate for Lower Home Loan Interest Rates?
- Boost Credit Score: Pay bills on time, reduce debt, and correct report errors.
- Maintain Low DTI: Minimize existing debt and showcase stable income.
- Negotiate Fees: Seek waivers or discounts on processing and other charges.
- Larger Down Payment: Lower LTV reduces risk and interest.
- Add a Co-Applicant: Strengthen your application with additional income and a solid credit profile.
- Use Banking Relationships: Long-term loyalty can attract special deals.
- Shop Around: Collect multiple offers and use them as leverage.
How to Apply for a Home Loan?
| Steps | How to? |
|---|---|
| 1. Assess Financial Health | Evaluate your income, expenses, debts, and savings to determine your borrowing capacity. |
| 2. Check Credit Score | Obtain your credit report to ensure accuracy, as it influences loan approval and interest rates. |
| 3. Gather Documentation | Prepare necessary documents such as proof of identity, income statements, tax returns, bank statements, and details of existing debts. |
| 4. Get Pre-Approved | Seek pre-approval from lenders to understand your borrowing limit and enhance your credibility with sellers. |
| 5. Shop for Lenders | Compare offers from multiple lenders to find favorable interest rates and terms. |
| 6. Submit Application | Complete and submit the mortgage application with all required information and documentation. |
| 7. Loan Processing | The lender reviews your application, verifies information, and may request additional details. |
| 8. Underwriting | An underwriter assesses the risk of offering you a loan, which may involve further verification. |
| 9. Appraisal and Inspection | The lender orders an appraisal to confirm the property’s value; a home inspection identifies potential issues. |
| 10. Closing | Finalize the loan by signing necessary documents and paying closing costs, after which you’ll receive the funds to purchase your home. |
Tax Benefits on Home Loan Interest Payment
In India, the Income Tax Act, 1961, provides several deductions on home loan interest payments under Section 24b to encourage homeownership. Here’s an overview of the key tax benefits available:
Self-Occupied Property:
Deduction Limit: Up to ₹2 lakh per annum.
Conditions:
- The loan must be for the purchase or construction of the property.
- Construction should be completed within five years from the end of the financial year in which the loan was taken; otherwise, the deductible limit reduces to ₹30,000 per annum.
Note: Interest paid during the pre-construction period can be claimed in five equal installments starting from the year the construction is completed or possession is taken.
Let-Out (Rented) Property:
Deduction Limit: The entire interest amount is deductible.
Conditions:
- There is no upper limit on the deduction for interest paid.
- However, the loss from house property that can be set off against other income heads is capped at ₹2 lakh per annum.
- Any excess loss can be carried forward for up to eight subsequent years.
Tax Benefits on Joint Home Loans
Interest Paid: Up to ₹2 lakh per annum for each co-borrower under Section 24(b).
Conditions:
- Each co-borrower must be a co-owner of the property.
- Each co-borrower must contribute to the loan repayment.
Suggested Read: Joint Home Loan Benefits
How Credit Dharma Simplifies The Home Loan Journey?
Buying a home is a big step. Getting a home loan can be hard, but we make it easy. At Credit Dharma, we make this possible by offering lowest guaranteed interest rates that keep your monthly payments manageable, allowing you to enjoy more of what truly matters.
But that is not it. We offer:
- Guaranteed up to 100% funding
- Receive lifetime assistance and expert guidance long after your loan is approved.
- Enjoy a fully digital process with minimal paperwork
- Get your loan approved within just 1-2 weeks.
Frequently Asked Questions
The RBI has cut the repo rate by 25 basis points (bps) from 6.5% to 6.25%, which typically leads to lower lending rates, including home loan interest rates. This can result in reduced EMIs for existing borrowers with floating rates and make home loans cheaper for new borrowers.
However, borrowers with fixed-rate home loans won’t see a reduction unless they refinance. The actual impact will depend on how soon banks adjust their lending rates and pass on the benefits to customers.
Home loan interest rates can be fixed or floating. Fixed-rate loans have a constant interest rate throughout the loan tenure, meaning the EMI remains unchanged. Floating-rate loans, on the other hand, fluctuate based on RBI’s repo rate and market conditions, leading to possible changes in EMIs over time.
With Credit Dharma, you can easily compare home loan interest rates, loan tenure, loan amount, eligibility criteria, processing fees, and other charges from different banks—all in one place. You can get a detailed comparison of up to 4 banks, helping you choose the most suitable option based on your financial needs.
Most banks in India offer a 0.05% discount on home loan interest rates for women. Along with lower interest rates, some banks also provide reduced processing fees and additional benefits.
Yes, many banks offer concessional home loan interest rates for their employees. These loans, often referred to as staff home loans, typically come with lower interest rates, waived processing fees, and flexible repayment options. However, the eligibility and benefits vary from bank to bank, and these offers may change based on internal policies.
Senior citizens do not get direct discounts on home loan interest rates, but some banks offer customized schemes. These may include a lower loan-to-value (LTV) ratio based on retirement income, flexible repayment options like step-down EMIs or co-applicant eligibility, and reverse mortgage loans that provide monthly payouts based on property value. Banks like SBI, PNB, and HDFC have special home loan schemes for senior citizens.
Yes, your credit score directly affects your home loan interest rate. A high credit score (typically 750 or above) increases your chances of getting a lower interest rate, while a low score may lead to higher rates or loan rejection. Lenders use your credit score to assess your repayment history, financial discipline, and risk level before approving the loan.
Home loan interest rates depend on several factors, including your credit score, income stability, loan amount, repayment tenure, and type of interest rate (fixed or floating). Lenders also consider market conditions, the RBI’s repo rate, and their internal policies.
As of March 2025, Union Bank of India offers one of the lowest home loan interest rates starting at 8.10%, p.a, followed by Bank of Baroda at 8.15% p.a. onwards. Private banks like ICICI Bank and HDFC Bank offer home loans starting at 8.75%.
In India, lenders quote home loan interest rates on an annual basis but calculate and apply the interest monthly. They divide the annual rate by 12 to determine a monthly rate and then apply that rate to the outstanding principal each month to compute the interest portion of the Equated Monthly Installment (EMI). Consequently, although lenders express the interest rate annually, they perform the interest calculations and process repayments every month.
Yes, you can claim a tax exemption on home loan interest payments under Section 24(b) of the Income Tax Act. You can deduct up to ₹2 lakh per year on interest paid for a self-occupied house. If the property is rented out, there is no upper limit on interest deduction.
HDFC Home Loan
SBI Home Loan
