Home loans: Banks and housing finance companies that offer lowest interest rates
Several banks have already announced hike in interest rates on home loans linked to repo rates post RBI's policy action on May 4, while others could increase their rates from June 1
Reserve Bank of India (RBI) Governor Shaktikanta Das hiked repo rates by 40 basis points on May 4 and almost immediately, several banks followed suit. Others are likely to raise their rates in June.
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Since most banks have chosen repo rate as the external benchmark for floating-rate retail loans sanctioned after October 1, 2019, rates will go up by 40 basis points for all such home loans. External benchmarking regime is not applicable to housing finance companies, but they are bound to increase their rates in line with their competitors, as some have already done. According to data from Bankbazaar.com, 14 financial institutions offer sub-7 percent interest rate on home loans of Rs 75 lakh with 20-year tenures.
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At present, India's largest bank the State Bank of India (SBI) charges an interest rate of 6.65 percent for a Rs 75-lakh home with a tenure of 20 years. The EMI works out to Rs 56,582. The bank has not announced an increase in repo rate-linked home loan rates so far, but it is likely that a 40-bps hike could take effect from June 1.
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At 6.7 percent, non-banking financial company (NBFC) Bajaj Finserv's home loan offer is amongst the cheapest at the moment. Every month, you will have to pay an EMI of Rs 56,805 on Rs 75-lakh home loan with a 20-year tenure.
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IDBI Bank is currently levying an interest rate of 6.75 per annum on such home loans. The EMIs work out to Rs 57,027 on Rs 75-lakh home loan with 20-year tenure.
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This public sector bank charges an interest rate of 6.8 percent on its Rs 75-lakh home loan with 20-year tenure.
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State-owned Central Bank of India levies a slightly higher interest rate of 6.85 percent. The EMI on a Rs 75-lakh home with 20-year tenure will work out to Rs 57,474.
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Public sector major Bank of Baroda offers an interest rate of 6.9 percent per annum on home loans of Rs 75 lakh. As many as eight other banks and NBFCs, including Punjab National Bank, Union Bank of India and LIC Housing Finance, offer the same rate on home loans.
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A note on the Bankbazaar data: Interest rates on home loans for all listed (BSE) public as well as private sector banks and housing finance companies, which offer home loans of up to Rs 75 lakh, have been considered for data compilation. Banks/HFCs for which data is not available on their websites have not been considered. Data has been collected from respective bank/HFC's website as on May 18, 2022. Banks and HFCs, in their respective sections, are listed in the ascending order on the basis of interest rate i.e. the institution offering the lowest interest rate on home loan (Rs 75 lakh) is placed at the top and highest at the bottom. The lowest rate offered by the bank/HFC on a loan of Rs 75 lakh has been considered for data compilation. EMI is calculated on the basis of interest rates for Rs 75-lakh loans with tenure of 20 years. Processing and other charges have been assumed to be zero for the purpose of EMI calculation.
