Let’s be honest: checking out home loan interest rates can feel a bit like scrolling through movie reviews—you’re never sure who’s spinning a tale and who’s telling it straight. All you want is a fair deal that won’t have you eating instant noodles for dinner after you’ve paid the EMI. Here’s a comprehensive overview of the top banks offers lowest interest rate home loans.
All Banks Home Loan Interest Rates 2025
Choosing the right home loan is crucial for your dream home. We’ve compiled 2025’s lowest to highest home loan interest rates from various banks to help you compare and select the best option for your financial goals.
| Bank Name | Interest Rate (p.a.) |
|---|---|
| Bank of India | 8.35% p.a. onwards |
| Union Bank of India | 8.35% p.a. onwards |
| Bank of Maharashtra | 8.35% p.a. onwards |
| UCO Bank | 8.35% p.a. onwards |
| City Union Bank | 8.35% p.a. onwards |
| Bank of Baroda | 8.40% p.a. onwards |
| Indian Overseas Bank | 8.40% p.a. onwards |
| Indian Bank | 8.40% p.a. onwards |
| Nainital Bank | 8.40% p.a. onwards |
| IDBI Bank | 8.45% p.a. onwards |
| State Bank of India | 8.50% p.a. onwards |
| Punjab National Bank | 8.50% p.a. onwards |
| Central Bank of India | 8.50% p.a. onwards |
| Punjab and Sind Bank | 8.55% p.a. onwards |
| Dhanlaxmi Bank | 8.60% p.a. onwards |
| South Indian Bank | 8.70% p.a. onwards |
| Axis Bank | 8.75% p.a. onwards |
| HDFC Bank | 8.75% p.a. onwards |
| ICICI Bank | 8.75% p.a. onwards |
| Kotak Mahindra Bank | 8.75% p.a. onwards |
| Karnataka Bank | 8.75% p.a. onwards |
| Federal Bank | 8.80% p.a. onwards |
| IDFC FIRST Bank | 8.85% p.a. onwards |
| J&K Bank | 8.85% p.a. onwards |
| Karur Vysya Bank | 9.00% p.a. onwards |
| RBL Bank | 9.00% p.a. onwards |
| YES Bank | 9.00% p.a. onwards |
| CSB Bank | 9.10% p.a. onwards |
| Bandhan Bank | 9.16% p.a. onwards |
| Tamilnad Mercantile Bank | 9.45% p.a. onwards |
| DCB Bank | 9.75% p.a. onwards |
| Canara Bank | 9.80% p.a. onwards |
| IndusInd Bank | Based on the external benchmark lending rate as per RBI’s guidelines |
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Banks Offering the Lowest Home Loan Interest Rates 2025
Here’s a list of top leading banks are offering the lowest home loan interest rate of just 8.35% p.a. This exceptionally competitive rate can help you save significantly on your home loan repayments.
Bank of India Home Loan Interest Rates @8.35% p.a.
Bank of India offers lowest home loan interest rates starting at a competitive 8.35%* p.a., making your dream of owning a home both affordable and within reach.
| Highlights | Details |
|---|---|
| Maximum Tenure | Up to 360 months |
| Maximum Loan Amount | Up to ₹5 Crore |
| Processing Fees | 0.25% of the loan amount (Min. ₹1,500; Max. ₹20,000) |
Eligibility Criteria
| Criteria | Details |
|---|---|
| Nationality | Indians/ NRIs/ PIOs |
| Type of Applicants | Individuals: Salaried, Self-Employed, Professionals Non-Individuals: Group/Association of Individuals, HUF, Corporates |
| Exclusions | Trusts are not eligible |
| Age | 18 years – 70 years |
Union Bank of India Home Loan Interest Rates @8.35% p.a.
Union Bank of India now offers home loans starting at 8.35% p.a., giving you an affordable pathway to owning your dream home. Experience convenient financing tailored to your needs and budget.
| Highlights | Details |
|---|---|
| Maximum Tenure | 30 Years |
| Maximum Loan Amount | No Limit |
| Processing Fees | 0.50% of the loan amount subject to a maximum of Rs. 15000 + GST |
Eligibility Criteria
| Criteria | Details |
|---|---|
| Nationality | Indians/ NRIs |
| Type of Applicants | Individuals: Salaried, Self-Employed, Professionals |
| Age | 18 years – 75 years |
Bank of Maharashtra Home Loan Interest Rates @8.35% p.a.
Bank of Maharashtra is now offering home loans starting at 8.35% p.a., making it easier and more affordable to purchase your dream home. Leverage flexible repayment options and competitive rates tailored to fit your financial needs.
| Highlights | Details |
|---|---|
| Maximum Tenure | 30 Years |
| Maximum Loan Amount | No Specific Limit |
| Processing Fees | 0.25% of the loan amount (subject to maximum of Rs. 25,000) |
Eligibility Criteria
| Criteria | Details |
|---|---|
| Nationality | Indians/ NRIs/ PIOs |
| Type of Applicants | Individuals: Salaried, Self-Employed, Professionals |
| Age | 18 years – 75 years |
How is Home Loan Interest Rate Decided by the Banks?
Banks set home loan interest rates by evaluating a range of economic, policy, and market factors. Each consideration shapes the final rate offered to borrowers.
1. Central Bank Policies
Central bank monetary policies, such as adjustments to the repo rate (the rate at which banks borrow from the central bank), directly influence lending costs. When the central bank raises the repo rate, banks incur higher borrowing expenses and typically respond by increasing their home loan rates. Conversely, a reduction in the repo rate usually leads to more affordable lending, encouraging banks to lower interest rates for homebuyers.
2. Economic Indicators
Key economic indicators guide banks in calibrating their rates:
- Inflation: Higher inflation often prompts higher interest rates, as lenders aim to protect margins against the eroding value of money. Low inflation generally supports lower rates.
- GDP Growth: Robust economic growth can boost loan demand, potentially driving interest rates upward. In contrast, during economic downturns, banks may reduce rates to stimulate borrowing and support recovery.
- Employment Levels: Strong employment fosters increased borrowing, which can influence interest rates. High employment often correlates with more stable lending conditions.
3. Demand and Supply Dynamics
The equilibrium between loan demand and credit supply plays a significant role. If borrower demand outstrips the available credit, banks may raise interest rates to manage the limited supply. Conversely, when credit is plentiful or demand wanes, banks often lower rates to attract more borrowers.
4. Risk Assessment
Assessing lending risk is a critical step in determining individual borrower rates:
- Credit Risk: Borrowers with strong credit scores and steady financial profiles qualify for lower rates. Those with higher perceived risk may face higher interest charges.
- Loan-to-Value (LTV) Ratio: A high LTV ratio (smaller down payment relative to the property value) represents a greater risk to lenders, often resulting in higher interest rates.
5. Market Competition
Competitive pressures among banks and financial institutions shape the interest rate environment. If competitors lower their rates or introduce special offers, others may respond by reducing their own rates to retain market share. This competition can often benefit borrowers through more favorable terms.
6. Global Economic Conditions
International economic events and fluctuations in global interest rates can indirectly influence domestic lending rates. Global uncertainty, capital flows, or shifts in foreign markets can lead local banks to adjust their rates to maintain profitability, manage risk, and stay aligned with global financial trends.
Strategies to Get the Lowest Interest Rates
| Strategy | Description |
|---|---|
| Boost Your Credit Score | Aim for 750+ credit score by paying bills on time and reducing debt. |
| Save for a Larger Down Payment | A higher down payment (20%+) can lower rates. |
| Shop Around | Compare offers from multiple lenders to find the best rate. |
| Choose a Shorter Loan Term | 15-year tenure often have lower rates than 30-year loans. |
| Reduce Debt-to-Income Ratio | Lower existing debts to improve eligibility. |
| Lock in Rates | Secure a rate when market conditions are favorable. |
| Maintain Stable Employment | Consistent income reassures lenders of your reliability. |
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Conclusion
Buying a home is a big step. Getting a home loan can be hard, but we make it easy. Choosing Credit Dharma for your home loan simplifies this process. We offer expert advice and personalized assistance to make everything hassle-free. You’ll receive timely updates on your loan application and disbursement progress.
From the initial application to the final disbursement, we provide comprehensive support. Enjoy clear and honest communication at every stage, with no hidden surprises.
Frequently Asked Questions
The lowest interest rate varies depending on the bank’s policies, promotional offers, and your financial profile. Currently, Union Bank of India, Bank of Maharashtra, and Bank of India are offering the lowest interest rates @8.35% p.a. onwards.
Most banks do not provide 100% financing for home loans. Typically, lenders offer up to 75-90% of the property’s value as a loan, requiring the borrower to pay the rest as a down payment.
Pay your credit card bills and EMIs on time.
Reduce existing debts to lower your credit utilization ratio.
Avoid applying for multiple loans or credit cards simultaneously.
Regularly monitor your credit report for errors and discrepancies.
Maintain a healthy credit mix (secured and unsecured loans).
This depends on your urgency and financial situation. Waiting for rates to drop may save costs, but market conditions can be unpredictable. If property prices are rising or you have found a suitable home, locking in a competitive rate now may be more beneficial than waiting for uncertain changes.
Fixed Rate: Ideal if interest rates are expected to rise or if you prefer consistent EMI payments.
Variable Rate: Beneficial if interest rates are likely to fall, as it can reduce your overall cost of borrowing.
HDFC Home Loan
SBI Home Loan
