Hunting for a home loan? Find out the latest rates and application details

Home loan rates: Looking for a home loan? As of August 2024, interest rates start at 8.30 per cent per annum across various lenders.  Here’s a snapshot of the latest rates and processing fees from leading banks and financial institutions to help you choose the best option for your needs.

What drives loan rates

When determining your home loan interest rate, lenders assess several key factors.
A strong credit score, typically 750 or higher, indicates responsible credit behaviour and can secure you lower rates. Banks increasingly use credit scores to set interest rates, so those with high scores are favoured.

"Income stability is crucial; applicants with secure jobs in government, PSUs, or established private firms often receive better rates. Conversely, those with irregular income might face higher rates," said Arpit Suri, CA and personal finance expert.

"The loan amount also affects rates, with loans up to Rs 30 lakh generally attracting lower interest compared to larger sums. Specialised loans, like Plot Loans or NRI Home Loans, may come with higher rates," Suri added.

Some lenders offer a concession of around 0.05 per cent for women borrowers, which can be advantageous for joint applications where the wife is the primary borrower. Notably, the choice between fixed and floating interest rates impacts your payments. Fixed rates, while offering payment stability, often come with higher rates due to the interest rate risk.

Here's a list of the latest home loan interest rates and processing fees from top banks and financial institutions across India:

Kotak Mahindra Bank: Starting at 8.70 per cent per annum with processing fees of 0.5 per cent plus taxes for salaried individuals and 1.0 per cent plus taxes for self-employed or commercial borroweRs

Union Bank of India: Starting at 8.35 per cent per annum with a processing fee of 0.50 per cent of the loan amount.

Bank of Baroda: Starting at 10.15 per cent per annum with no processing fee and a discounted upfront fee.

Central Bank of India: Starting at 8.50 per cent per annum with a processing fee of 0.50 per cent up to Rs 20,000 plus GST (waived until 31 March 2024).

Bank of India: Starting at 8.30 per cent per annum with no processing fee.

State Bank of India: Starting at 8.50 per cent per annum with a processing fee of 0.35 per cent of the loan amount plus GST.

HDFC Home Loans: Starting at 8.70 per cent per annum with processing fees of up to 0.50 per cent or Rs 3,000 plus taxes, whichever is higher, and a minimum retention of 50 per cent or Rs 3,000 plus taxes.

LIC Housing Finance: Starting at 8.35 per cent per annum with fees varying by loan amount:

• Up to Rs 1 crore: 0.25 per cent of the loan amount, maximum Rs 15,000 plus GST.
• Rs 1 crore to Rs 2 crore: Rs 20,000 plus GST.
• Rs 2 crore to Rs 5 crore: Rs 25,000 plus GST.
• Rs 5 crore to Rs 15 crore: Rs 50,000 plus GST.

Axis Bank: Starting at 8.75 per cent per annum with a processing fee of up to 1 per cent or a minimum of Rs 10,000 plus GST.

Canara Bank: Starting at 8.40 per cent per annum with a processing fee of 0.50 per cent of the loan amount.

Punjab and Sind Bank: Starting at 8.50 per cent per annum with processing fees varying by loan amount:

• Up to Rs 25 lakh: 0.15 per cent of the loan amount, with a minimum of Rs 1,000 and a maximum of Rs 3,750.
• Rs 25 lakh to Rs 50 lakh: 0.25 per cent of the loan amount, capped at Rs 12,500.
• Rs 50 lakh to Rs 75 lakh: 0.25 per cent of the loan amount, capped at Rs 15,000.
• Above Rs 75 lakh: 0.25 per cent of the loan amount.

IDFC First Bank: Starting at 8.75 per cent per annum with processing fees up to 3 per cent of the overall loan amount.

Bank of Maharashtra: Starting at 8.35 per cent per annum with no processing fees.

Punjab National Bank: Starting at 9.40 per cent per annum with no processing fee.

IDBI Bank: Starting at 8.40 per cent per annum with processing fees of 0.50 per cent (Rs 2,500 - Rs 5,000).

HSBC Bank: Starting at 8.45 per cent per annum with a processing fee of 1 per cent of the loan amount or Rs 10,000, whichever is higher.

Jammu and Kashmir Bank: Starting at 8.85 per cent per annum with a processing fee of 0.50 per cent plus GST (minimum Rs 2,000 and maximum Rs 50,000).

South Indian Bank: Starting at 8.35 per cent per annum with a processing fee of 0.50 per cent of the loan amount plus GST.

Federal Bank: Starting at 8.80 per cent per annum with a processing fee of 0.50 per cent of the loan amount, with a minimum of Rs 10,000 and a maximum of Rs 20,000.

Loan application breakdown

To apply for a home loan, begin by filling out the application form with essential details including personal information, current address, monthly income, educational background, employment history, property details, estimated property cost, and current financing method.

Once submitted, the bank will process the application, perform a credit score check, and verify the information. The loan is then sanctioned, which usually takes one to two days if the paperwork is accurate; in some cases, in-person verification may be required. Next, the bank will conduct technical and legal checks, assessing aspects such as construction progress for under-construction properties or examining resale properties for age, maintenance, and ownership rights.

After successful verification, you will need to pay a processing fee, typically between 0.25 per cent and 0.50 per cent of the loan amount. Finally, upon meeting all criteria, you will receive a formal agreement letter and the loan amount will be disbursed to your account, along with a complete EMI schedule sent via email.