At least 15 banks and four housing finance firms are currently providing home loans with interest rates beginning at less than 7% p.a. Most banks have reduced their home loan interest rates to multi-decade lows as a result of the Reserve Bank of India’s decision to maintain a low repo rate of 4% in order to combat the economic fallout of the current Covid-19 pandemic. In particular, at least 15 banks and four housing finance companies (HFCs) are currently providing home loans with interest rates starting at less than 7% p.a. This low-interest trend makes it a good time for potential home loan borrowers who have enough margin funds, a credit score of 750-800, and a good credit history.
Many aspiring borrowers will have a high loan quantum demand, particularly if they intend to buy a house in a metropolitan city, so all of these factors must be carefully considered. If you need a large loan, keep in mind that the maximum allowable loan-to-value (LTV) ratio might be marginally higher in your case than it is for someone who needs a smaller loan. In other words, a high-value property ( worth Rs.1 crore or more) can allow you to borrow up to 75%-80% of the property’s value, while a more affordable property may allow you to borrow up to 90% of the property’s value.
In addition, many lenders can charge higher interest rates on high-value loans than on lower-value loans. Before making a decision, you should carefully consider your margin financial obligations as well as the affordability of the loan EMIs after comparing your options based on your eligibility and requirements. If you’re deciding between a bank and a mortgage finance company for a home loan, keep in mind that the latter normally has slightly higher interest rates than banks, but they might be better suited for large loan amounts. Unlike banks, which offer a variety of credit products, HFCs specialize in home loan products.
Bank floating rate home loan interest rates are tied to an external index such as the repo rate, while HFCs tie their interest rates to their prime lending rate. If you’re looking for a high-value home loan, here’s a list of 10 banks and HFCs – including Axis Bank, Kotak Mahindra Bank, PNB, UBI, HDFC Ltd, and LIC Housing Finance Ltd – that are currently offering the lowest interest rates in the country for loans exceeding Rs 75 lakh. Please keep in mind that your interest rate will be calculated by your age, gender, income, credit score, loan amount, LTV ratio, and any other terms and conditions set forth by your chosen lender.