Whether it’s buying a home, upgrading your lifestyle, or covering unexpected expenses, loans have become a reliable financial tool for many in India. But let’s face it, while getting a loan might be easy these days, repaying it smartly is where the real challenge begins. And nothing impacts your repayment more than that tiny number we often overlook — the interest rate.
In this blog, we’ll walk you through where to find these competitive rates, which banks are offering the best deals in 2025, and how you can make sure you’re getting the lowest rate possible.
But a quick heads-up—loan interest rates aren’t carved in stone. They change with market trends, RBI policies, and even your own credit profile. So, while we’re here to guide you with the latest insights, always double-check the numbers directly with the banks before signing on the dotted line.
| Under Pradhan Mantri Awas Yojana (PMAY), eligible beneficiaries can avail themselves of a subsidised home loan interest rate of 6.50% p.a. for a tenure of up to 20 years, making housing more affordable for Economically Weaker Sections (EWS) and Low-Income Groups (LIG). |
Lowest Home Loan Interest Rates
Below is a table presenting the list of top banks offering competitive home loan interest rates, starting from the lowest available rates as of April 2025. Use this comparison to identify the most cost-effective options, keeping in mind that rates may vary based on individual eligibility and loan terms.
| Bank | Interest Rate (p.a.) | Processing Fee |
| Bank of Maharashtra | 7.85% | 0.25% of the loan amount + GST |
| State Bank of India | 8.00% | 1.50% of the loan amount + GST |
| Bank of India | 8.0% – 10.60% | 0.25% of the loan amount |
| Punjab National Bank | 8.15% | 0.35% of the loan amount + GST |
| Canara Bank | 8.15% – 11.0% | 0.50% of the loan amount |
| AU Bank | 8% p.a | 2% of the loan amount |
| HDFC Bank | 8.50% p.a. | 1.50% of the loan amount |
| Union Bank of India | 8.35% – 12.65% | 0.50% of the loan amount |
| Central Bank of India | 8.15% – 9.50% p.a. | 0.50% of the loan amount |
| Kotak Mahindra Bank | 8.65% | 1% – 2% of the loan amount |
Note: The following table presents indicative rates based on publicly available data. These rates are subject to change, and borrowers should seek personalised quotes.
Highlights of Lowest Home Loan Interest Rate
Let’s go through the key highlights of banks with the lowest home loan interest rates from below:
Bank of Maharashtra Home Loan
| Feature | Details |
| Interest Rate | • Salaried: From 7.85% p.a. • Self-employed: From 7.95% p.a. |
| Loan Amount | • Up to ₹15 lakhs (rural) • Up to ₹25 lakhs (semi-urban) |
| Loan Tenure | Up to 30 years or until borrower turns 75 |
| Processing Fees | Up to 0.25% (Max ₹25,000) |
State Bank of India Home Loan
| Feature | Details |
| Interest Rate | • Salaried: 8.00% p.a. • Self-employed: 9.25%–10.45% p.a. |
| Loan Amount | Based on eligibility |
| Loan Tenure | Up to 30 years |
| Processing Fees | 1.5% of the loan amount |
Bank of India Home Loan
| Feature | Details |
| Interest Rate | Starting from 8.00% p.a. |
| Loan Amount | Up to ₹5 crores or 90% of the property’s market value |
| Loan Tenure | Up to 30 years |
| Processing Fees | 0.25% of the loan amount
(Min ₹1,500, Max ₹20,000) |
Punjab National Bank Home Loan
| Feature | Details |
| Interest Rate | Starts from 8.80% p.a. |
| Loan Amount | Need-based; generally up to 90% of the property’s market value |
| Loan Tenure | Up to 30 years |
| Processing Fees | 0.35% of the loan amount |
Canara Bank Home Loan
| Feature | Details |
| Interest Rate | Starts from 7.90% p.a. |
| Loan Amount | Based on income (e.g., up to 6× annual income) |
| Loan Tenure | Up to 30 years |
| Processing Fees | 0.50% of the loan amount
(Min ₹1,500, Max ₹10,000) |
AU Bank Home Loan
| Feature | Details |
| Interest Rate | Starts from 8.00% p.a. up to 22.00% p.a. |
| Loan Amount | ₹2 lakhs to ₹5 crores |
| Loan Tenure | • Up to 30 years (salaried) • Up to 20 years (self-employed) |
| Processing Fees | Up to 2% of the loan amount |
HDFC Bank Home Loan
| Feature | Details |
| Interest Rate | Starts from 8.50% p.a. onwards |
| Loan Amount | • Up to 90% of property value (for loans up to ₹30 lakhs) • Based on eligibility & property |
| Loan Tenure | Up to 30 years |
| Processing Fees | • Up to 0.50% of loan amount • Minimum ₹3,300 for salaried/self-employed professionals |
Union Bank of India Home Loan
| Feature | Details |
| Interest Rate | Starts from 8.10% p.a. onwards |
| Loan Amount | • Up to 90% of property cost (for loans up to ₹30 lakhs) • Based on eligibility |
| Loan Tenure | Up to 30 years |
| Processing Fees | • 0.50% of the loan amount • Maximum ₹15,000 + GST |
Central Bank of India Home Loan
| Feature | Details |
| Interest Rate | Starts from 8.15% p.a. |
| Loan Amount | • Based on eligibility and property value • Up to 90% for loans up to ₹30 lakhs |
| Loan Tenure | Up to 30 years |
| Processing Fees | • Up to 0.50% of the loan amount • May be waived under special offers |
Kotak Mahindra Bank Home Loan
| Feature | Details |
| Interest Rate | Starts from 8.65% p.a. |
| Loan Amount | Based on eligibility, up to 90% of property value |
| Loan Tenure | Up to 20 years (some sources mention up to 25 years) |
| Processing Fees | Up to 1% of loan amount |
Factors to Consider Besides Home Loan Interest Rates
While the lowest interest rate is a significant factor, borrowers should also consider these other key factors before choosing a home loan:
• Processing Fees: Some banks offset low rates with higher upfront charges.
• Loan Tenure: Longer tenures reduce EMI but increase total interest outgo.
• Prepayment and Foreclosure Policies: Flexibility here can save money.
• Customer Service: Efficient grievance redressal is invaluable.
• Eligibility Criteria: Stringent criteria may limit accessibility.
How RBI Policies Impact Your Home Loan Interest Rate
The Reserve Bank of India (RBI) sets the repo rate, which is the rate at which it lends money to banks. When the RBI lowers the repo rate, banks often reduce their home loan interest rates, especially for floating rate loans. This means your EMIs can get cheaper. But if the RBI increases the repo rate to control inflation, banks may raise loan rates, making your home loan more expensive. So, changes in RBI policies directly affect how much interest you pay over time.
| Quick Fact: RBI reviews the repo rate every two months, which directly impacts floating home loan rates. |
Factors Influencing Your Home Loan Interest Rate
The interest rate you’re offered isn’t the same for everyone. It depends on several factors that lenders use to assess your profile. Here are the key things that can affect the rate you get on your home loan.
• Credit Score: A score above 750 generally unlocks better rates.
• Loan-to-Value (LTV) Ratio: Higher down payments can secure favourable terms.
• Employment Profile: Salaried individuals often enjoy preferential rates.
• Banking Relationship: Existing customers may negotiate better deals.
• Loan Tenure: Shorter durations can sometimes attract lower rates.
| Loan-to-Value Ratio (LTV)
Lenders use something called the Loan-to-Value Ratio (LTV) to decide how much they can lend you. It’s just a percentage that compares your loan amount to the value of the property. A lower LTV often means better loan terms because you’re borrowing less compared to the property’s worth. |
Ways to Find Lowest Home Loan Interest Rate
Getting the best home loan rate isn’t just luck — it takes a bit of research and smart planning. Here are some easy steps you can follow to find and lock in the lowest interest rate for your home loan.
• Compare Multiple Offers: Never settle for the first quote.
• Use Online Platforms: Aggregators provide a quick snapshot of market rates.
• Negotiate: Banks often have leeway, especially for high-creditworthy applicants.
• Consider Balance Transfers: If you’re locked into a higher rate, explore shifting.
• Maintain Financial Discipline: A healthy credit profile pays dividends.
Conclusion
Getting the lowest loan interest rate is about more than just picking the smallest percentage you see. It demands comprehensive comparison, awareness of associated costs, and a clear understanding of personal financial standing.
Remember, the best rate is one that aligns with both your immediate affordability and long-term financial health. With diligent research and strategic negotiation, achieving your dream of homeownership on favorable terms is well within reach.
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Frequently Asked Questions
What is the lowest home loan interest rate after the RBI repo rate cut?
Following the RBI’s repo rate reduction to 6.00%, banks like Bank of Maharashtra and Union Bank of India offer home loans starting at 7.85% p.a.
How can I find the lowest interest rate for a home loan?
Compare rates on financial platforms like BankBazaar and Paisabazaar, considering factors like credit score, loan amount, and tenure.
Which bank currently offers the lowest home loan interest?
As of April 2025, Bank of Maharashtra and Union Bank of India provide home loans starting at 7.85% p.a.
Is an NBFC a good option for a home loan?
NBFCS can be suitable for borrowers with lower credit scores or unconventional income sources, though they may charge higher interest rates than banks.
Can I get a 0% home loan?
No, 0% interest home loans are not available; all lenders charge interest to cover the cost of funds and associated risks.
Are NBFCS better than banks for home loans?
NBFCS offer flexible eligibility criteria but often at higher interest rates compared to banks; choose based on your financial profile and loan requirements.
Can I obtain a 100% home loan?
Most banks and NBFCS finance up to 75%-90% of the property’s value; 100% financing is rare and typically not offered by major lenders.
Which bank offers home loans without considering the CIBIL score?
While most banks assess CIBIL scores, some NBFCS may offer home loans to individuals with low or no credit scores, albeit at higher interest rates.
Which home loan is the cheapest currently?
Banks like Bank of Maharashtra and Union Bank of India offer some of the lowest home loan rates, starting at 7.85% p.a.
