A borrower needs to be well aware of the home loan interest rates in all banks in order to make the best choice that is both suitable and paired well with the monthly income received.
Nevertheless, choosing the right bank for a home loan with the best interest rates could be quite a difficult and time-consuming task. This is why, to help you eliminate this part of the process, we have curated this article that lists the top 15 best banks in India with their home loan interest rates for you to pick from.
But before that, let’s understand the types of interest rates one could come across:
Types Of Interest Rates In A Home Loan
There are two types of home loan interest rates that are charged by almost all banks in India:
1) Fixed Interest Rate:
Here, the rate of interest remains the same throughout the loan tenor as the rate remains fixed. Depending on the offer that is offered by the bank, a borrower will be allowed to switch to a floating rate system, provided they have completed the required duration in the loan tenure.
Pros:
- As the rate remains the same throughout, the borrower will be aware of the charges paid upfront
- The loan is also shielded from any frequent rate fluctuations that save a lot of money in the long run irrespective of the hike in lending rates
Cons:
- If the standard rate fall, there will be no benefit as the interest component is frozen to any fluctuations
2) Floating Interest Rate:
In a floating interest rate, the charges on the home loan are subjected to the present rates of the bank. In other words, the interest rate is linked to the latest rate of the chosen bank, depending on multiple factors like the RBI monetary policy, lending rate revisions, etc.
Pros:
- There is an added advantage of being billed based on the latest rate
- If the rates fall, there is a lot of interest charges saved
Cons:
- If the standard interest rate goes up, then the loan will bear the brunt of being billed with a higher rate
Note: Floating home loan interest rates are much cheaper as compared to the fixed home loan interest rates
Top 15 Indian Banks With Home Loan Interest Rates And EMI – April 2021
Listed below in the tabular form are the top 15 best banks in India with their home loan interest rates and EMIs:
| Name of the Bank | Floating Interest Rate (% per annum) | EMI | Processing Fee |
| Axis Bank | 6.9 – 8.55 | 769 – 871 | Up to 1% of the loan amount |
| Bank of Baroda | 6.75 – 8.35 | 760 – 858 | 0.25% to 0.5% of the loan amount |
| Bank of India | 6.95 – 8.35 | 772 – 858 | 0.25% of the loan amount |
| Canara Bank | 6.9 – 8.9 | 769 – 893 | 0.50% of the loan amount |
| Central Bank | 6.85 – 7.3 | 766 – 793 | 0.50% of the loan amount |
| Indian Bank | 7.0 – 7.40 | 775 – 799 | 0.230% of the loan amount |
| HDFC Ltd | 6.70 – 8.0 | 757 – 836 | Up to 0.50% for salaried and professionals, and 1.50% for Self-employed and non-professional |
| ICICI Bank | 6.70 – 8.05 | 757 – 840 | 0.50% of the loan amount |
| IOB | 7.05 – 7.3 | 778 – 793 | 0.5% of the loan amount |
| PNG | 6.80 – 7.85 | 763 – 827 | 0.35% of the loan amount |
| SBI | >= 6.95% | >= 772 | 0.40% of the loan amount, plus GST |
| South Indian Bank | 7.95 – 9.45 | 833 – 929 | 0.50% of the loan amount |
| UCO Bank | 6.90 – 7.25 | 769 – 790 | 0.50% of the loan amount |
| Kotak Mahindra Bank | 6.65 – 7.30 | 754 – 793 | 0.25% to 1%, plus GST |
| Union Bank | 6.8 – 7.40 | 763 – 799 | 0.50% of the loan amount |
Note:
The interest rates in the given table above are based on the floating rate system and are subject to revision after the specified tenure, or as per the bank’s terms and conditions.
The data is collected from the respective websites of the banks, as of April 12, 2021.
To Conclude: Calculating The Interest on Home Loans
Generally, home loans are long-term which is why a borrower needs to be aware of the overall interest liability. Here are two methods to calculate a home loan interest rate:
1) The EMI Calculator
Here, all you need to do is simply use the home loan EMI calculator online and calculate your interest rate on the home loan. You will need the following handy:
- Home Loan Amount
- Loan Repayment Tenure
- Rate of Interest
Once done, click on ‘Calculate’ and you’ll get the breakup of the loan with the amount payable towards interest.
2) The EMI Calculation Formula
Here, you can calculate your EMI liability for the home loan by using the EMI calculator below-
EMI = [P x r x (1+r)^n]/[(1+r)^n-1]
P = Principal
r = Rate of interest
n = number of instalments/loan tenure in months
FAQs: Home Loan Interest Rates And EMI Of Top 15 Banks In India For April 2021
1. What are the two types of interest rates?
There are two types of interest rates:
- Fixed-rate of interest
- Floating rate of interest
For more information, refer to the blog post above!
2. What is the EMI calculator formula?
The EMI calculator formula is:
EMI = [P x r x (1+r)^n]/[(1+r)^n-1]
Where;
P = Principal
r = Rate of interest
n = number of instalments/loan tenure in months
3. Is it possible to change the floating home loan interest rate to fixed?
Yes, it is possible to change the floating home loan interest rate to fixed.
- By renegotiating the terms with the existing lender
- By transferring your loan to a new lender
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