Home Loan Interest Rates 2020
|Bank Name||Interest Rate||Processing Fee||Loan Amount||Tenure|
|HDFC Bank Home Loan||6.95-7.50% (floating)||Up to 0.5%||Rs 5 lac- 10 cr||1-30 years|
|Axis Bank Home Loan||7.85-11.75% (fixed/floating)||0.50%||Rs 5 lac- 10 cr||1-30 years|
|ICICI Bank Home Loan||7.45-10.35% (floating rate)||up to 0.50% + tax||Rs 5 lac- 10 cr||3-30 years|
|PNB Housing Loan||8.85-9.85%||up to 0.25% + GST||Min. 8 lac||1-30 years|
|SBI Home Loan||6.95-7.50%||0.35%||Rs 5 lac- 10 cr||1-30 years|
|Bank of Baroda||6.85-7.85%||Loan amount up to Rs.50 lakh – 0.50%
Loan amount above Rs.50 lakh – 0.25%
|Rs 1 lac- 2 cr||30 years|
|Canara Bank||6.90-8.90%||0.50%||Rs 1 lac- 50 lac||30 years|
|DHFL Home loan||9.75-10.50%||up to 0.50%||Rs 1 lac- 3 cr||1-30 years|
|Federal Bank Home loan||8.5-10 years||Up to 0.50%||Rs 10 lac-15 cr||1-30 years|
A Home Loan is a secured retail product provided against the value of property or house that you want to buy. A Home Loan can be availed for buying a house, constructing a new place or renovating an old house.
A home is a place where we live the best moments of our lives. But buying your own house is not an easy task. It needs good funding. If you want to buy a new house and need finance to fulfil your dreams, you can apply for a home loan. A home loan is designed to cater to all these needs. All major Banks and non-banking finance companies provide home loans throughout the country.
Compare all offers online across the leading banks and NBFCs of India with DialaBank. Get the Lowest Interest Rates for your home loan by applying online or contact us on 98789-81166.
Home Loan: Features
The main features of a home loan are as follows:
- Low-Interest rates: Home loans are cheaper than the other loans because of its long term tenure period.
- Tax Benefits: Availing a home loan can provide you with tax benefits on both principal amount as well as interest rates. Section 24 and 80 C allows a person to claim a tax deduction of up to 2 lakh on availing a home loan.
- Home Loan balance transfer: allows a person to transfer the entire outstanding amount to a new lender, who offers a lower rate of interest.
- Flexible Loan Tenures: The home loan tenures usually go up to 30 years. An individual can also choose to prepay the entire amount if he is eligible to do so.
Types of Home Loans
Banks and NBFCs in India provide different types of home loan options according to various needs. Here’s a list of the main types of housing loans availing in India:
- New Home Loans: are offered to customers looking to purchase a new house or property for the first time.
- Home Renovation Loans: Home loans for renovation are offered to borrowers who wish to renovate/extend their existing house.
- Balance Transfer Home Loan: can be used to transfer an individual’s home loan from one bank to another, looking for lower interest rates.
- Home Purchase Loans: are specifically provided to borrowers seeking to purchase a residential house or flat.
- Home Loan for Construction: is offered to customers who are looking to construct a new house on an existing piece of land.
- Plot Loans: are loans offered to customers looking to purchase a piece of land or plot for house construction.
- Home Loan Top Up: is an add-on facility offered by most banks and NBFCs that allows existing customers to borrow a certain amount above and over the already existing home loan.
- Step-up Loans: is when the borrower is given the liberty to pay a lower EMI amount during the earlier days of repayment which gradually increase as the tenure progresses.
- Bridge Loan: is a short-term housing financing that helps the borrowers to “bridge” the gap between their existing and new mortgages by allowing them to keep the equity of the current residence as a down payment for buying a new house, waiting for the sale of the old house.
- Interest Saver Loan: This allows the borrower to deposit his excess savings in a current account linked to his home loan account. While calculating the interest component, the bank deducts the balance in the current account from the borrower’s outstanding principal.
- Home Extension Loan: is a loan that can be availed to extend an already existing residential property by adding space or new rooms to it.
Home Loan Interest Rates
There are two basic kinds of Home Loan Interest Rates:
- Fixed-Rate Home Loan: The loan EMIs remain constant for the Fixed-rate home loans, and do not depend on lending rate fluctuations. The rates are usually higher for a Fixed-rate home loan.
- Floating-Rate Home Loan: The EMI amount for these home loans alter with changes in the interest rates with time. It comprises of Index and Spread in which Index is the benchmark rate that alters with RBI’s policy changes and Spread remains constant as it is the additional charge that a bank adds to cover up the risk factor.
|Fixed Interest Rate||Floating Interest Rate|
|Higher Interest Rate||Lower Interest Rate|
|Not affected by financial market conditions||Affected by changes in the financial market|
|Fixed EMIs||EMIs change as per interest rate or MCLR|
|Budget planning possible||Difficult to budget or manage financials|
|Sense of security||Generates savings|
|Suitable for short/medium term (3-10 years)||Suitable for long term (20-30 years)|
|Lesser risk||Higher risk|
|Name of Lender||Interest Rate|
|HDFC Bank||6.95% onwards (floating)|
|DHFL Home loan||9.75% onwards|
|Bank of Baroda||6.85% onwards|
|Axis Bank||7.85% onwards (fixed/floating)|
|ICICI Bank||7.45% onwards (floating)|
|Oriental Bank||10.5% onwards|
|State Bank of India||7.95% onwards|
Other than the interest amount, there are various other fees and charges that your lender might levy on you from the time of applying for the home loan till you repay it entirely. Some of the main charges are as follows:
Fees and Charges on a Home Loan
- Application Fee is charged by lenders to cover the preliminary expenses that the lender has to bear for conducting the verification.
- Processing Fee covers the cost of credit appraisal and depends on the borrowers’ credit profile, income and the home loan scheme. Not all lenders may levy processing fee.
- The administrative fee is charged only by those lenders who split the processing fee into two parts. The part that is charged after the loan sanction is known as the administration fee.
- Foreclosure/Prepayment Charges are levied when a borrower prepays the home loan either fully or partially before the end of the loan tenure. All lenders earlier used to charge prepayment penalties and foreclosure charges on the home loan. But RBI has now banned lenders from charging individuals with prepayment penalties on floating rate home loans. As far as fixed-rate home loans are concerned, only some lenders levy these charges.
- Repayment Mode Related Charges are levied when the borrowers place a request to their lenders to change their existing repayment mode during the loan tenure period. The fee usually ranges up to Rs. 500 per swap and varies from one lender to another.
- Rate conversion/switching fees are charged when borrowers request their lenders to switch or reduce their existing interest rates due to various reasons. The fee varies from one lender to another and usually goes up to 2% of the outstanding principal amount.
- CERSAI Charges is the central online security interest registry of India. Potential lenders visit CERSAI website to check whether the pledged property is not claimed by some other lender. For this process, the lenders pay a nominal fee, which they later collect from borrowers.
- Overdue Charges on EMI are levied when a borrower misses or delays in any form the timely payment of loan EMIs. It attracts penal interest rates on the outstanding dues or overdue instalment over the prevailing loan interest rates. Therefore, borrowers must pay the loan EMIs on time.
- EMI Bounce Charges are levied on the borrower when you fail to make timely loan payment due to insufficient funds in your bank account. Lenders usually levy Rs. 500 on such defaults which may vary from one lender to another.
- Franking Fee, also knows as the stamp duty fee is a tax levied by the state government on any form of a monetary transaction involving the transfer of rights of a property.
Eligibility Criteria for Availing a Home Loan
There are certain eligibility requirements that are required to be fulfilled to avail a home loan. The basic requirements that are applicable to India, irrespective of the bank/NBFC are as follows:
|Home Loan Eligibility Criteria|
|Nationality||Indian Residents, Non-Indian Residents (NRIs) and Persons of Indian Origin (PIOs)|
|Credit Score||750 or above|
|Age Limit||Minimum – 18 years|
|Maximum – 70 years|
|Work Experience||At least 2 years|
|Business Continuity||At least 3 years|
|Minimum Salary||At least Rs. 25,000 per month (varies across lenders & locations)|
|Loan-to-Value (LTV) Ratio||Up to 90% of the property’s value|
Check on how you can increase your home loan eligibility.
Essential Documents Required to Avail a Home Loan
In order to get your home loan application approved, there are certain essential document requirements for home loan that need to be duly fulfilled. The main documents required are as follows:
|Identity Proof||Residence Proof||Other Documents|
|Driving License||Copy of Electricity Bill/Water Bill/Telephone Bill||Employer Identity Card|
|PAN||Copy of valid Passport/Aadhar Card/Driving License||Duly filled loan application form affixed with 3 passport size photographs|
|Voter ID||Loan account statement for the previous 12 months if the applicant has any other ongoing loan from other banks/financial institutions|
|Valid Passport||Bank account statements for all the bank accounts owned by the applicant for the last six months|
|For Self-employed Applicant/Co-applicant:||For Salaried Applicant/Co-applicant:|
|Income Tax Returns for the last 3 years||Salary Slips for the last three months|
|Certificate of Qualification (for Doctors/C.A. and other professionals)||Copy of Form 16 or Income Tax Returns for the last two years|
|Balance Sheet audited by a certified C.A and Profit and Loss account for the previous 3 years|
|Business License Details|
|Business address proof|
Documents Required for NRI applicants:
|Identity Proof||Residence Proof||Other Documents|
|PAN||Telephone bill||Attested copy of the applicant’s/co-applicants’/guarantor’s valid passport and visa|
|Valid Passport||Electricity bill||Proof of residence indicating the applicant’s current overseas address|
|Driver’s License||Water bill||Employer Identity Card|
|Voter ID Card||Piped Gas bill||If the applicant is employed in the Merchant Navy, the applicant is required to submit a copy of Continuous Discharge Certificate (CDC)|
|Valid Passport||PIO Card issued by the Government of India in case the applicant/co-applicant is a Person of Indian Origin (PIO).|
|Driving License||The completed loan application form duly filled with three passport size photographs of the applicant and co-applicants.|
Property Documents Required: NOC from Society/Builder, detailed estimate of the cost of construction of the house, registered sale deed, allotment letter and an approved copy of the building plan.
Home Loan Prepayment and Foreclosure
- Home Loan Prepayment is the partial payment of his/her home loan before the end of the loan tenure. Loan prepayment ultimately helps in reducing the loan principal amount, further reducing the EMI amount.
- Home Loan Foreclosure is when a borrower fully repays the home loan in a single payment instead of paying in instalments before the loan tenure completion.
Note: On fixed-rate home loans, some lenders still levy prepayments and foreclosure charges.
Home Loan Balance Transfer
A home loan balance transfer is a facility that allows the borrowers to transfer their entire outstanding home loan to a new lender offering a lower interest rate. Paying your loan EMIs regularly helps determine your loan transfer facility. But before going for home loan balance transfer it is essential to calculate the difference between the interest rates offered by the two lenders, the amount of the loan left unpaid and the loan tenure left.
Also, the new lender would charge you a processing fee for the balance transfer.
Check the SBI Bank Home loan Balance Transfer here.
DialaBank as Your Best Agent
Applying for a housing loan is an easy process. There are mainly two steps by which a person can avail a housing loan.
Online process: Follow the steps below to avail a housing loan online instantly:
- Visit our website dialabank.
- Fill in your basic details like name, income, location, the loan you are looking for in the form as per requirements.
- Click on Request a Quote.
- Our relationship manager will soon get in touch with you over your application and will help you choose the right loan for yourself.
Offline Process: The process of applying offline for a housing loan is an easy process. Just visit the nearest branch of your lender providing a housing loan and the experts will guide you through the entire process.
Home Loan EMI Calculator
A Home Loan EMI calculator is an online tool that helps calculate the monthly instalments i.e EMIs to be paid during the entire loan tenure, depending on your loan amount and interest rate. DialaBank offers you a free home loan EMI calculator so that you know the EMI in advance. The home loan EMI calculator is also beneficial for comparing different loan options available in the market.
Click to calculate your EMI amount using Home Loan EMI Calculator.
FAQ’s About Home Loan
✅ What are fixed and floating rate housing loans?
The rate of interest for fixed-rate loans remain constant for the entire tenure of the loan. On the other hand, the interest rates for floating rate home loans can be changed depending on the RBI’s policy rates.
✅ Am I eligible to prepay my outstanding housing loan amount?
Yes, you can choose to prepay your outstanding loan amount before the completion of your loan tenure. Fixed-rate home loans mainly attract a penalty up to 2% of the loan amount.
✅ Can I have a co-applicant for my housing loan?
Yes, you can have a co-applicant provided he/she is your immediate family member such as your spouse, your parents or your children.
✅ What is MCLR?
Marginal Cost of Funds Lending Rate or MCLR is a benchmark rate set by a lending firm below which they cannot provide loans to the customers.
✅ When will my loan repayment period start?
The loan repayment period begins soon after the loan provider disburses the entire home loan amount into your bank account. Post which you will be required to pay the EMI on the disbursed loan on a monthly basis.
✅ Am I eligible to take 2 housing loans at the same time?
Yes, you can avail 2 home loans at the same period provided that your bank/NBFC approves your eligibility to repay 2 Equated Monthly Instalments (EMIs) at the same time.
✅ Can I get 100% financing on a housing loan?
No. Banks/NBFCs do not grant 100% of the property value as a home loan. A margin is established on their loan i.e. the percentage of the cost that the lending institution will be covering.
✅ Does having a personal loan affect housing loan eligibility?
Other ongoing loans like personal loans and car loans ultimately affect your eligibility as your overall spending power is eventually reduced. In case your other loan commitments exceed 60% of your monthly income, your home loan application may get rejected.
✅ Is a personal loan better than a housing loan?
If your purpose if to fund a house, a home loan is the best option. Also, the funds required for home funding are very high that a personal loan usually cannot fund.
✅ What are joint home loans?
A joint home loan can be availed by adding any immediate co-applicant such as your spouse, parents. Adding a co-applicant will eventually increase your eligibility criteria. All co-owners of the property are essentially required to be the co-applicant for a home loan.
✅ How to avoid housing loan rejection?
The points below can help you prevent a home loan rejection in many ways:
Credit Score: It is recommended to maintain a credit score of 750 and above to have a good chance of your application being approved. Banks & Financial Institutions heavily depend on CIBIL score to approve your home loan application form and to check your credibility and your efficiency of loan repayment history.
Insufficient Income: Banks and Non- Banking financial institutions check your monthly income to see if you will be able to repay your equated monthly instalments (EMIs) efficiently. It is advisable to take a home loan with EMI not more than 40% of your monthly income. Each lender has its own minimum income and employment requirements that play an important role in the process of the loan application.
Too many applications for a home loan in a short span of time: If you keep applying for home loans from different lenders, it indicates the banks and financial institutions that you are falling short of credit and need to apply to several sources to fill the financial gap in. Lenders thus think that you will not be able to repay your loan amount efficiently, which would lead to rejection of your home loan application.
Existing loan portfolio: Currently, if you have a large number of loans to repay, then your lender might think that you will not be able to take on another EMI on your existing income, which will lead to your home loan rejection. So, it is better to apply for a housing loan once you have paid off a few of your other loans to reduce your EMI burden.
✅ Are there any prepayment charges in case of a housing loan?
In case of a floating rate for a home loan, lenders don’t charge a pre-payment penalty as per the new directives of RBI regulations however a penalty may be applied in case of prepayment of a fixed-rate home loan.