Diwali, an auspicious pan-India festival of lights, marks a significant opportunity for new beginnings, including purchasing or moving into a dream home. Banks are capitalising on this feelgood sentiment, and are offering attractive festive season promotions to facilitate these milestones for potential homebuyers.
Before taking on a housing loan, a buyer needs to work out a feasible repayment plan, beginning with sustainable equated monthly instalments (EMIs) to meet long-term personal finance goals.
Festive home loan offers
The financial institutions have unveiled enticing loan offers, featuring special and attractive interest rates that are lower than usual to good credit score customers, reduced processing fees, and flexible repayment options for potential homebuyers. While these promotions promise substantial savings and convenience, financial advisors have urged caution. They have warned against any hasty decisions that could lead to long-term financial hardships.
Data from Paisabazaar.com reveals that for a home loan of Rs 75 lakh for a tenure of 20 years, the top 15 banks are offering interest rates ranging between 8.35 per cent and 8.7 per cent.
Here's a lowdown of the banks offering the most competitive interest rates this festive season. To be sure, these are indicative rates and the actual rates may vary because of the customer's credit profile, income, etc.
Bank of India, Bank of Maharashtra & Union Bank of India
Starting at 8.35 per cent, the home loan interest rate offered by these banks is the cheapest. The EMI on a Rs 75-lakh home loan with a 20-year tenure will work out to Rs 64,376.
Bank of Baroda, Canara Bank, Indian Bank, Indian Overseas Bank & Punjab National Bank
These four banks levy an interest rate starting from 8.4 per cent. The EMI on a Rs 75-lakh home loan with a 20-year tenure works out to Rs 64,613.
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UCO Bank & Punjab & Sind Bank
These banks charge an interest rate starting at 8.45 per cent on home loans. The EMI on a home loan of Rs 75 lakh with a 20-year tenure will be Rs 64,850.
| INTEREST RATES ON A HOME LOAN | ||
| Bank | Lowest interest rate p.a. offered by the bank (%) | EMI on a Rs 75-lakh home loan for 20-year tenure |
| Union Bank of India | 8.35 | 64,376 |
| Bank of India | 8.35 | 64,376 |
| Bank of Maharashtra | 8.35 | 64,376 |
| Bank of Baroda | 8.4 | 64,613 |
| Punjab National Bank | 8.4 | 64,613 |
| Canara Bank | 8.4 | 64,613 |
| Indian Overseas Bank | 8.4 | 64,613 |
| UCO Bank | 8.45 | 64,850 |
| Punjab and Sind Bank | 8.45 | 64,850 |
| State Bank of India | 8.5 | 65,087 |
| HSBC Bank | 8.5 | 65,087 |
| Karnataka Bank | 8.5 | 65,087 |
| Tamilnad Mercantile Bank | 8.6 | 65,562 |
| South Indian Bank | 8.7 | 66,039 |
| Rates as of October 23, 2024 | ||
| Source: Paisabazaar.com |
These bank charges interest starting at 8.5 per cent on home loans. The EMI on a home loan of Rs 75 lakh with a 20-year tenure will be Rs 65,087.
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Tamilnad Mercantile Bank
This bank charges interest, starting at 8.6 per cent. The EMI on a home loan of Rs 75 lakh with a 20-year tenure will be Rs 65,562.
South Indian Bank
This bank charges interest, starting at 8.7 per cent. The EMI on a home loan of Rs 75 lakh with a 20-year tenure will be Rs 66,039.
Tips for homebuyers during this festive season
Amid this festive season bonanza, potential homebuyers should exercise caution and careful consideration. Before making a purchase, a buyer must ensure h/she has saved a sufficient amount for the initial down payment. The buyer must do due diligence, such as conducting a thorough research of the developer's reputation and track its past record to safeguard reliability. Project details should be verified on the Real Estate Regulatory Authority (RERA) website for transparency. Buyers need to guard against enticing festive offers that may conceal hidden costs or biases.
Prioritise evaluating your affordability and aligning the purchase with your future goals is the growing mantra. Significantly, a buyer ought to factor in additional costs such as registration, stamp duty, interior expenses, and home insurance before making an informed decision.
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