Several banks have raised interest rates on home loans after the Reserve Bank of India hiked repo rates on February 8. All floating-rate retail home loans sanctioned by banks after October 1, 2019, are linked to external benchmarks, which in the case of most banks is the repo rate. So, all banks will pass on the entire rate hike to existing home loan borrowers. Though the interest and EMI burden is rising sharply, some housing finance companies and banks continue to offer sub-8.75 percent interest rates on their offerings, as per data compiled by Bankbazaar.com.
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At 8.10 percent, GIC Housing Finance currently offers the lowest rate on home loans. The EMI on a Rs 75-lakh home loan with a 20-year tenure will amount to Rs 63,201.
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The top three slots on the list of cheapest lenders are occupied by HFCs, with another state-owned entity, Repco, bagging the second slot. It offers an interest rate of 8.3 percent and the EMI works out to Rs 64,141 in this case.
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India's largest mortgage lender HDFC offers an interest rate of 8.45 percent at present. The EMI on a Rs 75-lakh loan with a tenure of 20 years will amount to Rs 64,850.
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Government-owned PNB Housing Finance charges an interest of 8.5 percent currently. The EMI in this case works out to Rs 65,087.
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Public sector lender Central Bank of India offers an interest rate of 8.55 percent on home loans. The EMI will amount to Rs 65,324.
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At 8.6 percent, the home loan interest rates offered by Union Bank of India, along with Bank of Maharashtra, Indian Overseas Bank and Bajaj Finserv, figure in the list of cheapest home loan rates. The EMI on a Rs 75-lakh loan with a 20-year tenure will work out to Rs 65,562.
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Kotak Mahindra Bank presently charges an interest of 8.65 percent on home loans. The EMI on a home loan of Rs 75 lakh with a 20-year tenure will be Rs 65,801.
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At 8.6 percent, state-owned housing finance giant LIC Housing Finance's interest rates are at par with Kotak Mahindra Bank's. The EMI works out to Rs 65,801.
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Aditya Birla Housing Finance is currently charging an interest of 8.75 percent on its home loans. The EMI will amount to Rs 66,278.
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At 8.75 percent, this private sector lender's offering figures in the list of 10 cheapest home loan schemes. The EMI works out to Rs 66,278.
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Interest rates on home loans for all listed (BSE) public and private banks as well as housing finance companies listed on National Housing Bank’s website that offer home loans up to Rs 75 lakh have been considered for the data compilation. Banks/HFCs for which data is not available on their websites have not been considered. Data was collected from the respective bank/HFC's website as on February 20, 2023. Banks and HFCs are listed in ascending order on the basis of interest rate i.e. bank/HFC offering the lowest interest rate on home loan (loan amount= Rs 75 lakh) is placed at the top and the highest at the bottom. The lowest rate offered by the bank/HFC on loan of Rs 75 lakh has been considered in the table. EMI is calculated on the basis of the interest rate mentioned in the table for a Rs 75-lakh loan with a tenure of 20 years (processing and other charges are assumed to be zero for EMI calculation). The data is compiled by Bankbazaar.com and Moneycontrol Research.
Preeti Kulkarni is a financial journalist with over 13 years of experience. Based in Mumbai, she covers the personal finance beat for Moneycontrol. She focusses primarily on insurance, banking, taxation and financial planning
