These six banks, three private and three public, offer the lowest interest rates when buying a house.
If you're planning to buy a house, now is a good time. Lower interest rates and multiple offers by banks during the festive season could make your loan deal a steal.
Here's a look at some of the top home loan products on offer from six banks, three each in the private and public spaces, to help you choose the right one.
Here's a glimpse of the interest rates these banks offer:
Interest rates apply differently based on your income, profession, and many such factors. Many banks also offer low-interest rates to women.
These six banks offer minimal processing fees, best interest rates, and the government-launched Pradhan Mantri Awas Yojana (PMAY) scheme otherwise called the Credit Linked Subsidy Scheme (CLSS). The CLSS was introduced so that the Economically Weaker Sections (EWS) and Low Income Groups (LIG) seeking home loans can avail the loan for an interest subsidy at 6.5 percent rate for a loan term of 20 years or lower.Planning To Avail A Home Loan? 9 Things You Must Know
Following are exclusive features of the home loan products offered by each of the six banks:
> Axis Bank's new product offers regular repayment with waiver of 12 EMIs — 4 EMIs each after the fourth year, eighth year and the twelfth year from the date of the first disbursement. The effect of EMI waiver will be in the form of reduction in loan tenure.
Planning To Buy A House? Here are 10 Things To Keep In Mind
> HDFC offers two types of loans - Adjustable Rate home loan and TruFixed home loan. The adjustable rate home loan is linked to its Retail Prime Lending Rate (RPLR). If the RPLR changes, the bank will revise the interest rate on the loan once in 3 months based on the date of the first disbursement. This means it may not necessarily change the EMI.
In case of TruFixed home loans, the fixed interest rate will be applicable for a certain period while for the balance term an adjustable rate will be charged. So, a fixed rate can be availed for a maximum term of 2 to 3 years, after which the loan will automatically convert to a flexible rate.
> ICICI offers Home Loan Overdraft Facility. Exclusive to salaried customers having home loans with the bank, this facility allows to avail loans of up to Rs 1 crore for personal needs in the form of overdraft.
> State Bank of India through SBI MaxGain offers overdraft facility in a different way, unlike ICICI's. The loan under this scheme, with the same interest rate as other home loan schemes in SBI, is sanctioned as an overdraft with a limit equal to the approved loan amount.
> Bank of Baroda's (BoB) Home loan advantage offer allows customers to sync home loan deposits with a separate saving bank account linked to the home loan. The amount will automatically be deducted, without earning any interest rate from the savings account. This is done so that you do not have to pay the interest linked to the loan.
> Punjab National Bank offers overdraft facility in their Flexible Housing Loan, but also allows repayment via EMIs. PNB introduced this scheme in 2004.
How do home loans work?
If you're buying a house for the first time you should be aware of which bank is offering the most affordable interest rates.
Out of the interest rate you pay, a major chunk falls under the Marginal Cost Lending Rate (MCLR) and/or base rate category. Existing loan customers, the ones before MCLR was enforced, will continue with the MCLR. Many banks advise customers to switch to MCLR to benefit from lower EMIs.For every loan, a collateral is required in the form of house or any other property, for contingency in case the borrower defaults.You can now invest in mutual funds with moneycontrol. Download moneycontrol transact app. A dedicated app to explore, research and buy mutual funds.