In this first instalment of Moneycontrol’s regular feature of highlighting the cheapest loans across categories, we begin by giving you the cheapest home loans.
Home loan interest rates in the country are at a 15-year low, with several banks charging less than 7 per cent across slabs. Interest rates have declined sharply since the Reserve Bank of India’s (RBI) cumulative 115 basis points rate cut after the COVID-19 outbreak-induced lockdown in March. A basis point is equal to one-hundredth of a percentage point.
Public sector banks offer the best rates
Moneycontrol will bring out the best rates being offered on loans on a weekly basis.
As you can see, public sector banks have been offering some of the cheapest rates, as per BankBazaar data. In fact, seven of the lowest 15 interest rate offering banks in the home loan segment are state-owned banks. If you are paying 45 bps more than the cheapest rate in the market, your equated monthly instalment (EMI) will be higher by Rs 2,000 a month. In fact, some private banks such as Axis Bank and YES Bank are quoting rates of 7.75 per cent and 9.5 per cent a year, respectively.
While only banks have to adhere to external benchmark-linked pricing, competition has compelled housing finances companies such as the country’s largest mortgage lender HDFC and LIC Housing Finance, too, to slash rates.Watch this space for interest rates charged by such non-banking financial companies (NBFC).