Top 10 Best Banks For Home Loan

best banks for housing loans

What makes this year the focal point for investors to purchase a property by using a borrowed capital is by considering the fact the Reserve Bank of India (RBI) may not cut the policy rates anytime soon and that the home loans in India are rather low. What adds to the interest in a home loan are the discounts that are offered by the developers, as well as, the reduction in the stamp duty-announced by various state governments.

Nonetheless, it becomes quite difficult for most home buyers to then select the best banks to best a home loan while evaluating the lowest home loan interest rates and its overall effectiveness of the bargain. This is why this article becomes even more crucial as we list the top 10 best banks for housing loans in India in 2023, just for you!

These the banks that offer the most affordable deals and the rates that are mentioned are inclusive of the floating rate of interest that is linked with the repo rate of RBI and not the marginal cost of funds that are based on the lending rate (MCLR) regime.

Top 10 Best Banks To Take Home Loan With Lower Interest Rates In India

1) State Bank of India (SBI) - Best Banks For Housing Loans

State Bank of India (SBI)

SBI- a government-run bank, is considered the largest mortgage lender in India. It currently assists over 30 lakh families in their home purchases. They also have over 24,000 branches, both, in the country and abroad.

Highlights –

  1. SBI is the first bank to reduce the interest rates for a home loan if the RBI lowers the repo rate
  2. You can really on the bank to meet the borrowing needs, as it is one of the best performing banks in India
  3. It has a great financial health benefit

Downside –

  1. SBI will require a lot more documents as compared to the other banks as it strict due diligence in order to affirm the creditworthiness of the borrower
  2. The best rates for a home loan are only offered to borrowers that have credit scores of 750 or above

SBI bank's home loan interest rate

Rate of Interest on Home LoansBest rate*Highest rate*
For salaried individuals6.7%7.20%
For self-employed individuals7%7.40%

Longest tenure: 30 years

Affordability scale: High 

 

2) HDFC - Best Banks To Take Home Loan

HDFC

HDFC has a record of helping about over 80 lakh people with the best home loan to help them purchase their dream houses. 

Highlights –

  1. The bank is among the first to reduce the interest rate after RBI announcing the rate cuts
  2. They have a higher scope with the best home loans to their customers

Downside –

  1. The bank only offers home loan for borrowers who have a credit score of at least 750

HDFC bank's home loan interest rate

Rate of Interest on Home LoansBest rate*Highest rate*
For salaried individuals6.75%7.40%
For self-employed individuals6.75%7.85%

Maximum tenure: 30 years

Processing fees: Up to 0.50% of the loan amount or Rs 3,000, whichever is higher.

Affordability scale: High

3) ICICI Bank - Best Banks For Housing Loans

ICICI Bank

ICICI is the second-largest private lender in the capitalization market that was promoted in 1994 and was wholly a subsidiary. The bank currently owns a network of 5,288 branches all across India.

Highlights –

  1. ICICI offers a quick benefit of quick rate transmission
  2. Is easy to work with as they have multiple online platforms for access

Downside –

  1. Since the bank offers a wide range of banking products that include financial services, retails, etc, you can end up with a lot of cold calls in a day

ICICI bank's home loan interest rate

Rate of Interest on Home LoansBest rate*Highest rate*
For salaried individuals6.75%7.95%
For self-employed individuals6.95%8.05%

Maximum tenure: 30 years

Processing fees: 0.50% of the home loan amount.

Affordability scale: High 

4) Bank of Baroda - Best Bank For Housing Loan In India

Bank of Baroda (BoB)

Bank of Baroda is the third-largest bank in India with 13 other major commercial banks that were nationalized on July 19, 1969, by the government.  It currently has more than 10,000 branches, both,  in India and abroad.

Highlights –

  1. Getting a home loan is easy due to the online platform

Downside –

  1. Borrowers with a lower credit score will find the cost of home loan rates very high

Bank of Baroda home loan interest rate

Rate of Interest on Home LoansBest rate*Highest rate*
For salaried individuals6.75%9%
For self-employed individuals7%9%

Maximum tenure: 30 years

Processing fees: None currently

Affordability scale: High 

5) Punjab National Bank - Best Bank For Housing Loan In India

Punjab National Bank (PNB)

Punjab National Bank is the second-largest public bank in India that offers a floating interest rate at a much affordable offer. They have about over 80 million customers and 6,937 branches that are widely spread across 764 cities.

Highlights –

  1. The housing loan for the borrower is lower due to the temporary waiver in the processing fee
  2. The bank offers invariably rewards for those with a good credit score

Downside –

  1. The image of the bank has considerably suffered due to the surge in toxic loans and involvement of fraud cases
  2. The services are less customer-friendly as compared to the other private lenders

Punjab National Bank's home loan interest rate

Rate of Interest on Home LoansBest rate*Highest rate*
For salaried individuals6.80%7.40%
For self-employed individuals6.80%7.40%

Maximum tenure: 30 years

Affordability scale: High

6) LIC Housing Finance - Best Banks To Get A Home Loan

LIC Housing Finance

LIC is observed to have approved over 3.35 lakh home loans by offering home loan interest rates.

Highlights –

  1. The bank offers the borrowers 90% of the property value as a home loan

Downside –

  1. The home loan interest rates are not as low as most leading banks

LIC Housing Finance home loan interest rate

Rate of Interest on Home LoansBest rate*Highest rate*
For salaried individuals6.90%7.80%
For self-employed individuals7%7.90%

Maximum tenure: 30 years

Affordability scale: Average

7) Canara Bank - Best Bank For Housing Loan In India

Canara Bank

This bank which is over a century old has its headquarters in Bengaluru. It currently operates over 10,391 branches across India and became the fourth-largest state-owned bank as of last year with a business size of over Rs 16 trillion.

Highlights –

  1. You can pay your home loan until the age of 75 years

Downside –

  1. In case you seek a higher home loan, you’d be required to make a contribution of up to 25% of the property’s value.
  2. They charge a processing fee on home loans, unlike most banks

Canara Bank's home loan interest rate

 

Rate of Interest on Home LoansBest rate*Highest rate*
For salaried individuals6.90%8.90%
For self-employed individuals6.90%8.90%

Maximum tenure: 30 years

Processing fees: 0.50% of the loan amount with the minimum and the upper limit capped at Rs 1,500 and Rs 10,000, respectively.

Affordability scale: Average

8) Union Bank - Best Bank To Take Home Loan In India

Union Bank of India

Union Bank has its headquarters in Mumbai and is a public lender. It offers the lowest home loan interest rates in the market with a network of over 9,500 domestic branches in India.

Highlights –

  1. They offer loans to borrowers who are 18 years of age, unlike most banks
  2. The bank has no limit on the quantum of the home loan

Downside –

  1. The transmission of the downwards changes are slow

Union Bank's home loan interest rate

Rate of Interest on Home Loans Best rate* Highest rate*
For salaried individuals 6.70% 7.15%
For self-employed individuals 6.90% 7.35%
Maximum tenure: 30 years Processing fees: 0.50% of the total loan amount with the upper limit capped at Rs 15,000. Affordability scale: High

9) HDFC Bank - Best Bank For Housing Loan In India

HDFC Bank

HDFC was incorporated in 1994 and owns a nationwide network of around 5,430 branches in India.

Highlights –

  1. It offers faster benefits of policy rate cuts as compared to the other banks

Downside –

  1. You might have to wait longer to get a home loan approved as the bank may request many documents with multiple checks

HDFC Bank home loan interest rate

Rate of Interest on Home Loans Best rate* Highest rate*
For salaried individuals 6.80% 7.85%
For self-employed individuals 6.80% 7.85%
Maximum tenure: 30 years Processing fees: Up to 0.50% of the loan amount or Rs 3,000, whichever is higher. Affordability scale: Average

10) Axis Bank - Best Bank For Housing Loan In India

Axis Bank

Axis bank is a leading private sector bank that currently runs around 4,500 branches, in both, India and abroad.

Highlights –

  1. They offer good rewards to the credit-worthy borrowers
  2. Are the first ones to offer lower home loans in India

Downside –

  1. Axis bank does not offer a processing fee waiver
  2. The bank has a rather high processing fee as compared to the other banks

Axis bank's home loan interest rate

Rate of Interest on Home Loans Best rate* Highest rate*
For salaried individuals 6.90% 8.40%
For self-employed individuals 7% 8.55%
Maximum tenure: 30 years Processing fees: Up to 1% of the loan amount, with the minimum amount capped at Rs 10,000. Affordability scale: Average

To Conclude:

While you are searching for the best bank for a home loan make sure you keep the following points in mind:

  1. Due to the delinquency rates, most banks offer the best interest rates to applicants that carry a good credit score. Which means, above 700.
  2. Your home loan EMI payments will not immediately reflect the changes in the repo rate as these are rates that are reset as per the bank’s fixed intervals
  3. Even the best banks will not be able to charge a penalty for prepayment of home loans that are linked to the floating rate of interests.

FAQs: Top 10 best banks to get home loanssthetic and functionality!

1. What is the repo rate?

It is the interest that India’s apex bank-RBI charges from scheduled banks of the country to offer funds. This also means that whenever there is even the slightest of a change in the repo rate, the banks increase or decrease the interest rates for the borrowers.

2. Will you be required to pay a high-interest rate if the credit score is poor?

Most Indian banks offer the best interest rates to customers who have impressive credit scores. Therefore, the ones with a poor score will need to pay higher interest rates.

3. How is HFC different from the other banks?

HDFC is one bank that purely engages in home loans as compared to the other banks that are involved in various other activities as well. Refer to the article above for more information!
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