Best home loan interest rates in India


Best home loan interest rates in India, Current home loan interest rates in India(Mar-13)5 Best home loan interest rates in India (Updated April-2014)

Home loans offer opportunity to buy home without the need of having 100% money in the pocket. Though the current home loan interest rates vary bank to bank, picking up a best home loan is critical as it is a long term debt. Small interest rates variances can make a huge difference in the payout. In this article we would compare the home loan interest rates, their features and pick-up best home loan interest rates.

Consider the following factors, before taking the home loan.

  • Prefer home loans with low interest.
  • Look at the interest rates trend, if they increasing quarter of quarter, or year on year, one should be ready for the increased EMI in coming years.
  • Low processing fee: Home loan institutions are charging 0.5% to 1% processing fees to process home loans. Pick up the home loan where there are low processing fees.
  • Look for zero pre-payment penalties: Earlier only a few banks used to waive pre-payment penalty. Currently almost all banks are waiving off the pre-payment penalty.

Also read: Why people are afraid of taking home loan.

Best Home loan interest rates in India  (Updated April-2014)

Let us look at some of the best home loan interest rates in India. We have picked-up these best home loans based on low interest rates, low processing fees and zero pre-payment charges (if the loans are paid either partially or fully during the tenure of the loan).

1) State Bank of India home loans

  • Home loan interest rate: 10.10% for Women and 10.30% for Others
  • EMI would be Rs 972 (Women) and Rs 975 (Others) for every 1 Lakh of home loan
  • Processing fees: Up to Rs 25 lakhs – 0.125% or Rs 1,000 minimum;     Rs 25 to Rs 75 lakhs – Rs 3,250;   Rs 75 lakhs and above – Rs 5,000
  • Prepayment charges: Nil

2) HDFC Limited home loans

  • Home loan interest rate: 10.25%
  • EMI would be Rs 982 for every 1 Lakh of home loan
  • Processing fees            : 0.5% of loan amount or max of Rs 10,000+service tax
  • Prepayment charges    : Nil

3) Indian Bank home loans


  • Home loan interest rate : 10.25%
  • EMI would be Rs 982 for every 1 Lakh of home loan
  • Processing fees             : Nil
  • Prepayment charges     : Nil

4) ICICI Bank home loans

  • Home loan interest rate: 10.10% (For Female),10.15% (For Others) (Upto 25Lacs), then 10.25%
  • EMI would be Rs 972 (Women) and Rs 975 (for others) for every 1 Lakh of home loan upto Rs 25 Lakhs home loan. Beyodnd this EMI would be Rs 982 for every 1 Lakh of home loan
  • Processing fees            : 0.5% of loan amount
  • Prepayment charges   : Nil

5) LIC Housing Finance Limited home loans

  • Home loan interest rate: Scheme I:10.20% (Fixed for 2 yrs);  Scheme II: 11.25% (Fixed for 10 yrs);  Scheme III: 12.25% onwards
  • EMI would be Rs 978 (Scheme-1); Rs 1,049 (Scheme-2); Rs 1,119 (Scheme-3) for every 1 lakh of home loan
  • Processing fees            : Upto Rs 50 Lakhs – Rs 10,000+service tax and beyond Rs 50 Lakhs – Rs 15,000 + service tax
  • Prepayment charges    : Nil

Interest article: 10 Tips to be considered before taking home loan

Below are the current home loan interest rates in India / comparison of home loan interest rates in India

Comparison chart for interest rates, processing fees charged by them and prepayment penalty details (Updated 15-February-2014)

Best home loan interest rates in India, Current home loan interest rates in India-Apr-2014

Readers, I invite your valuable comments and feedback about this article.

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Suresh
Best home loan interest rates in India

 


Article by Suresh

Suresh KP i.e. me have written 400+ articles on this blog. I love doing analysis and identifying the Best investment options.

137 Comments

  1. Naresh Chandavarkar says:

    Sir please advise I want avail housing loan of 20lac for the teenier of 15years. I can keep 10 lac of FD.

    pls advise which, where and how to avail.  

  2. sreedhar says:

    Hi,

    I want to take Home loans from State bank of Mysore. I want to know how floating intersts rates are changing from past 1 year. Now interst rate is 10.3%. How about SBI floating rates changing from last 1 year.

    So whether i have to go with SBM or SBI. Please help me on this.

  3. sudhi says:

    Hai Nitin,
    I am looking for plot +construction loan from SBI. What if I dont construct house within the two years time and I pay the outstanding amount by the end of two year which I lend for plot purchase? Pls clarify

  4. Sachin Kadam says:

    Hi Suresh,

    Is there any restriction impose upon the finance companis or bank by the RBI to charge maximum interst rate upon the Home Loan. is there any rules or regulation of RBI in that respect.

    My friend has obtained home laon from A U Housing Finance Ltd. Jaipur. they are charging interest upon the loan amount @ 19.13. is this legal to charge such huge interest rate on home loan account.

    thanking you

     

    Sachin 

    • Suresh KP says:

      Sachin, There are no restrictions on home loan rates or personal loan rates. These are charged by banks or financial institutions at their own rates.

  5. Balamurugan says:

    Hi Suresh, Am in a confusion whether to take homeloan from LIC or HDFC, please suggest me the best option. 

    • Suresh KP says:

      Hi Bala, Both are good. It depends on the interest rates. Check whether they are offering any good interest rates for your company employees ? This way you can reduce interest rates.

  6. Ratan says:

    Can you please let me know if husband has already a house loan running and now wife as taken a house and will it be count as second property for her and husband is only co-appplicant for wife property  and will the interest rate be more eg.icici for females its 10.10 interest rate and now as a second property will it be as 10.20 interest rate

    • Suresh KP says:

      Ratan, As per my knowledge, Co-applicant would be counted as owner of the house. Hence it would be treated as second house. why don’t you call ICICI and clarify this ?

  7. harish says:

    Hi,

    we are planning to buy plot in sarjapur,banglore. it cost around 18L.looking for loan amount for 13L.

    first apllicant will be my wife and second applicant as myself.

    loan looking for peroid of 3-5 years.

    can you suggest which bank will be the best with loan options with pros and cons.

    shortlist banks are SBI,LICHL or HDFC.

    Thanks,

    Harish.

     

    • Suresh KP says:

      Harish, You have become expert in this. You have kept them the order of preference. You should go for SBI Housing loan. Pls see this article. The interest rate would have changed now, given a choice to me, I prefer SBI. http://myinvestmentideas.com/2013/07/sbi-home-loans-cheapest-home-loans-in-india/

  8. praveenraj says:

    Dear Suresh,

    Thanks for having such a wealth of info on your blog.

    I wanted to get some inputs from you .

    Below is my current Scenario :

    I have taken a home loan of 30L (15 yrs term) and its almost been 1.5 yrs since the EMI has started. My monthly EMI is 32500.  All my savings in MF and other funds have come to nill after house registration etc . My current annual investment is into LIC (52 K premium/annum ).

    After all our expenditures (Me n Wife ) , our monthly savings or cash in hand is 35K which i need to utilze effectively for  3 goals .

    1. To close my loan early

    2. Invest on child education (Corpus fund at the end of 15 yrs )

    3. Back up money for emergency

    Kindly give your suggestions

    Reg

    PraveenRaj

     

    • Suresh KP says:

      Praveenraj, I have the follwing suggestions 1) You need to first create emergency money of 5 to 6 months savings. My suggestion is to start an RD for 6 months and create this 2) 7th month onwards you can start investing in mutual funds. This would help you to manage loan closure and child education. Investing in large cap funds, 20% in mid-cap funds and 20% in balanced funds can help you to achieve these goals faster. 

      • praveenraj says:

        Hi Suresh ,

        Thanks a lot for your revert, you have suggested me for 20% in mid-cap funds and 20% in balanced funds , what about the bal 60% of revenue .Where should that be invested.Please advice

        Regards

        PraveenRaj

  9. Sachin says:

    Indiabulls Housing Finance offers home loans @10.25% upto 25lacs.

  10. Srikanth says:

    Hi Suresh,

    I  am 33yrs old have a 2 yrs old son. I have taken Maxgain HomeLoan for 25yrs @10.40% and will start paying EMI from June-2014.Have taken insurance for the loan. At this time dont have much savings in hand have utilised for my house.

    I am planning for an RD for 5yrs with Rs.4000/p.m can i go with it or just put the money ideal in my HomeLoan acount which will be the better option for me to get maximum benifit.

    • Suresh KP says:

      Srikanth, You would be ending up paying 10.4% interest to bank and in your RD you would get less than 9%. Means you are looser to the extent of 1.5% interest. You have two options 1) Pay high EMI or home loan account 2) Invest in high return options like Large cap mutual funds which are less riskier comparing to other investment options. You may expect 13% to 15% returns in long run where you can create wealth with such small amounts.

      • Srikanth says:

        Suresh,Thanks for the reply.

        I am planning to go for Birla Sun Life Frontline Equity Fund (Large Cap) or HDFC Top-200 Fund (Large Cap) SIP for 5 to 10 years. Can i go with this fund are can you suggest other funds if any.

        Regards,

        Srikanth

  11. sathick says:

    Hi suresh,

    I have taken 3 lac fixed intrest rate of 8.5% from ICICI bank in the year of 2005.Every month i am paying EMI around Rs.3000.Year 2020 is the end of my loan peroid.Now i got enough money to pay all the balance amoun.

    If i pay all the balance amount in one time will i get benifited or I can continue with the monthly EMI 3000 rupees.? which is good please advise me in this.

    • Suresh KP says:

      Sathish, Banks collect interest amount in initial period and small amount only goes for repayment of capital. If you are paying this after 8 years, you would be paying majority of principal amount and less of interest, hence you would not benefit much. You can still make the payment and get rid of it. But if you have any further plans of buying home with loan in future, try to retain this and use the hard cash to pay downpayment for that.

  12. KSRAO says:

    Hi,

    I have taken housing loan from LIC. 70% of loan amount has been disbursed. Due to some issues I would like to move to other bank. Building is still under construction. Other banks are ready to take over loan even full amount is not disbursed. Now LIC is imposing 2% pre closure and service charges if other bank takeover loan. If I pay myself then there won’t be any charges. Is it RBI rule or is it bank specific rule. Can someone help me on this?

     

    Thanks

    KSRAO

  13. Anurag says:

    Hi Suresh

    To the best of my knowledge banks lends home loan based on their base rate. SBI is offering base rate @ 9.80 %. After checking the history of base rate since July 2010, it has increased significantly as mentioned below.

    Effective Date ————–Interest Rate (%) 
    04.02.2013——————–9.70 
    20.09.2012——————–9.75
    13.08.2011——————–10.00
    11.07.2011———————9.50
    12.05.2011———————9.25
    25.04.2011———————8.50
    14.02.2011———————8.25
    03.01.2011———————8.00
    21.10.2010———————7.60
    01.07.2010———————7.50

    On one side LICHF is offering home loan for 10 yr fixed @11.25%. Though in case of LICHF i shall be paying higher ROI i.e.,1.15 % in comparison to SBI floating. On the other side the base rate history of SBI tells that there is significant increase in the base rate which is 2.30% since july 2010. 

    In the light of my understanding i want to know:
    1. which option is better.LICHF 11.25% fixed or SBI floating @ 10.10%.
    2. what are the future complexities involved in LICHF in case of 10 yrs fixed?  They may increase the interest rate in between?

    • Suresh says:

      Hi Anurag, If you read my article about Fixed rate Vs floating rate which is better article, you would get some insights. Since interest rates are peak now and they might go up little bit, else there is no more scope to go still higher. In such situation locking your money in fixed rate is not good. You should lock your money at fixed rate when rates are low. 1) It is always better to take SBI under current situation 2) LICHF would charge this fixed rate and they cannot increase further. Beyond 10 years, yes, the floating rate indicated by LICHFL would be applicable. They cannot increase rate before 10 years.

    • Sekhar Mohajan says:

      Dear sir,

       

      Please send the Floating Rate of Interest for Home Loan from 2008 to 2013 of all Nationalised Bank of India.

      Kindly help me…………….

       

      Thanks an Regards,

       

      Sekhar Mohajan

       

  14. Siva says:

    Hi Suresh,

    With the above mentioned interest rates, axis bank gives at 10.25%(upto 25lacs) which is lesser than LIC and HDFC. 

    So can we consider axis bank as next to SBI instead LIC and HDFC for loan upto 25lacs.

    Thanks

    Siva

     

    • Suresh says:

      Yes Siva agreed with you. If you are considering only Rs 25L Loan, you can go for Axis after SBI. However beyond Rs 25L, still others indicated are good.

  15. rajan says:

    Hi Suresh,

    I am comparing home loan from vijaya bank to SBI ? Is it almost ok to go ahead with any one of these or SBI still scores over any other scheduled bank ? The rate of interest for Vijaya is 10.25% while for SBI it is 10.1% ?

     

    • Suresh says:

      Hi Rajan, Small difference in interest rate would have several Lakhs of impact as the interest you would be paying is for 20 years. Go for low interest rates

  16. Manoj kumar singh says:

    Suresh bhay,l have taken agency of Lic home loan.I m also lic agent.
    Pl help mail me how to get home loan clients…pl pl pl help me…wait for yr mail

    • Suresh says:

      Ha ha, just because you have taken agency, people would not come to you. Tell few positive things about the loans in comparison with other home loans and give your contact no in message, people may contact you.

  17. Bhavin says:

    Hi Suresh,

    For the flaoting rate home loan, there are two components in the interest rate – Base rate and Margin.

    Base rate we know will fluctuate as per the RBI guideliness and the market scenario.

    However, will the margin always remain constant? Or can that vary too? How can we confirm if that will stay constant or vary too?

    Regards,

    Bhavin.

  18. Jokula says:

    Suresh

    I have 2 two storeyed buildings with multiple tenants some with shops and some residential. I was looking to buy another building by mortaging any of the building I own. But, none of the bank seem to be giving out loans that way..Why? One of them said they wouldnt consider bldngs with multiple tenants, other said they dnt consider commercial bldngs?

    What purpose would it make bldngs if you cannot leverage its value for your need?

    How do I avail loan in such cases to buy commercial bldngs?

    Appreciate your valued opinion

    • Suresh says:

      Jokula, Something is wrong. The answers given by them are strange. Have you tried SBI or ICICI bank or LICHFL. There are no such restrictions that bank cannot give mortgage loans for commercial buildings. Try other banks.

      • Jokula says:

        Suresh

        I have tried Axis, Syndicate Bank and Canara..allof them repsonded negatively. They are willing to give you money on residential prop but not commercial ones. I havent tried LICHFL, but the banks are asking me to approach pure money lenders like Muthoot or of those clan. I find that strange? They are basically not categorically saying " NO"..but discouraging, quoting higher rates and the usual dirty tricks. Its not a personal loan, but a loan against a property!! A collateral doesnt suffice anymore?

  19. Sufia Athar says:

    dear Suresh!

    Greetings..

    I have taken 28 lacs as home loan from LIC for 13 years.3 years I have been paying EMI.I Want to payback the money in instalments.how to go for it!

    I want to pay the money back 

    • Suresh says:

      Hi Sufia, LICHFL would accept you for pre-payment of home loan. If you have surplus money every year, you can choose one extra pre-payment of whatever amount you have. If you can pay twice in a year, you can do that. I think LICHFL do not have any restrictions on that.

  20. vivek says:

    Dear Suresh,

    I had choiced one property and taken sanction letter from Gruh Finance where in i had paid all processing fees & other charges. interest rate mentioned on that letter was 10.4% floating. Unfortunately due to society issue I could not bought that property & validity also ended in june 2013.

    now I found new property & when I approached again to Gruh finance for sanction letter they are asking interest rate of 11%. even though now other banks have lowered there interest rates than they were offering six months back.

    pls advice what to do in such cases.

    • Suresh says:

      Vivek, I do not see much changes in home loan rates in last few months. However your would have got the letter 3 months back or so. You can get better deals with SBI, LICHFL or HDFC. Have you tried  them ?

  21. Sobin says:

    Hi Suresh,
    Thanks a lot for your advice. It was quite informative. I have taken a home loan of 25 lakhs at an fixed interest rate of 11.25 % for 24 years from State Bank of Tranvancore. Can you please suggest whether any bank can take over from SBT ? Is there any other solution ?

    Regards,
    Sobin

    • Suresh says:

      Sobin, You can try SBI, HDFC or LICHFL. The interest rates offered are low. You can switch-over from SBT to them. But see the cost involved in such conversions like interest rates or pre-payment charges or processing charges.

  22. Sobin says:

    Hi Suresh,

    Thanks a lot for this free advice. It was quite informative. I had taken a home loan from State Bank of Travancore for 25 Lakhs for buying a home in my native place in Kerala for a hefty interest rate of 11.25 % for 24 years (I know its a burden and blunder i had commited). Can any of PSU or prvate banks take over my loan ? Is there any other solution ? Please bail me out.

    Regards,

    Sobin.

    • Suresh says:

      Sobin, Yes there are several banks like SBI, HDFC, LICHLF where you can transfer the loan and reduce your interest burden. Call the customer support people and they should proivde more details about documentation and charges.

  23. Sachin says:

    Dear Suresh sir,

    please suggest which option is best

    1. LIC offering 10% for first three year

    2. HDFC offering 10.15% floating.

    also if I repayment from any other source then this finanace will accept that if accept then they will they deduct /minimise my principle ammount.

    Regards

    Sachin

    • Suresh says:

      Sachin, On face of it it looks LICHFL is good. But check what would be floating rate for LICHFL after 3 years. A small percentage can make huge difference. 

      • Prakash says:

        Hi,

        I have taken 9% fixed for the first three years in 2010 but now i am paying 11.9% interest, which is very high i guess, compared with other  banks interest of 10.5%.

        i an not sure, why the interest rate difference of 1.5% for the new and old customers.

         

         

         

        • Suresh says:

          Prakash, You can do a cost analysis to transfer your loan to another home loan provider like SBI, LICHFL or HDFC. Based on that you can take decision to switch-over

      • Satish says:

        LICHFL will hike the interest rate rapidly once your fixed tenure finishes, i've taken loan at 9% fixed for 3 yrs fixed and now im paying 11.75% at floating rate. LICHFL provide attractive offer for new customers by charging more on existing customers

         

        • Suresh KP says:

          Thanks Satish for your feedback. What I observed is when some one says “Fixed” for “X” years, we should do our analyis what happens after this fixed period. Banks like SBI or HDFC charge 10.3% (approx) floating, hence I don’t think they would change the interest rates at later point of time except where there is change in rate of interest which could be small hike. But I would be more interest to know what is there in agreement when you signed ? Have you enquired with existing loan holders before considering LICHFL ? This would help me to provide more insights to the readers of this blog.

  24. Rohan says:

    Hi Suresh, I am looking for a good offer for home loan upto 18 lacks. Acc to you HDFC is good and is offering 10.15(upto 30L) but I dont see it as fixed rate. it is saying 10.15 floating, Could you please advise. Also, Is it advisable to take Home loan with floating rate of interest.

    • Suresh says:

      Rohan, These banks are often modifying their schemes to attract the customers. Banks like SBI and HDFC are offering now only for floating rate. Since the interest rates are high, you should go for floating rate now. If you get fixed rate for 3 years or so, you can choose that too. Check with HDFC customer whether there are any special schemse now.

      • Manoj Khetan says:

        Hi Suresh,

        HDFD has a Fixed rate oprtion available for 15 years ….That option is known as Tru Fixed rate Option…Moreover in 2-3 days the rates are going to increase for Home Loans….

  25. S Dash says:

    Hi Suresh, I have a HL from LICHFL taken in Aug 2011. 11% fixed for 5 yrs and floating for next 15 yrs. I am paying an emi of 25821 every month. I wanted to transfer this to SBI but the builder says we can't switch to SBI but other banks. What is the best option available as of today except SBI? Moreover, would also like to know if I can get a top-up loan to cover the extra cost and renovation charges of 15 L next year this time during possession.

    • Suresh says:

      Dash, After SBI, I prefer HDFC or LICHFL. Pls check with builder as to why he says you cannot switch to SBI ? Yes you can get top-up loan for renowation. First you close the loan transfer part and with such proces, you can get top-up loan too in single shot.

  26. Samsai says:

    HI,

    I am looking for Home loan ,and  DHFL offers the loan. can anyone suggest about the DHFL , how genuine and benefits they offer.

     

  27. Chandan says:

    Hi Suresh,

    I was just checking my LIC HFL Statements for this year and I found that they are charging 11% interest chagres in my home loan for a long time. Are they cheating me or now its 11%. Please help

    Cheers,

    Chandan

    • Suresh says:

      Chandan, You should check whether you have signed up for Fixed or floating. Currently home loan interest rates are high except for SBI and HDFC which are charing between 9.9% to 10.4% which are low. I heard LICHFL is offering between 10.8% to 11% fixed now.

  28. vinoth says:

    Dear Suresh,

    Your article is really useful.

    i plan to take home loan. if i go with SBI its take lot of time to take sancation loan , so please some other banks.

    and one more thing. iheard about CANARA bank. they are providing same interest rate as SBI(9.95%). shall i approach with CANARA BAnk.

    • Suresh says:

      Vinoth, You can approach Canara Bank too. Just check on processing fees and Terms and conditions for pre-payment. You can even check LICHFL.

  29. Kedar says:

    I have taken a loan of 35 lacs from HDFC and the current ROI is 10.4%. I have made a few prepayments and the principal outstanding is less than 30 lacs now. If I switch my loan to SBI, will I be eligible to get 9.95% ROI?

    Can HDFC reduce it's ROI, now that I have moved from above 30 category to below 30?

     

    Thanks

    Kedar

  30. Kapil says:

    Hi Suresh

    We are looking for home loan and we have following options for banks to go for , except SBI.We are working in private firm.

    HDFC , ICICI, AXIS, LICHF, PNB and CITI

    Can you suggets among these ? Also we have doubt about fixed & floating interest rates opt for ?

    Thanks

    Kapil

    • Suresh says:

      Kapil, I would prefer SBI, LICHF, HDFC in order. Yes, there are various parameters to be considered. When interest rates rates are high (current situation), you should opt for floating rates so that they would get reduced at later point of time.

      • Kapil says:

        Suresh 

        Today when I checked with HDFC bank agent for home loan,  he said about diminishing rate of interest. I have understanding of floating/fixed rate of interest but what is this diminishing rate of interest. Which one benifial among these three rate of interest ?

         

        • Suresh says:

          Kapil, It is a surprise to me. There are only Fixed rate and floating rate home loans. Can you please provide contact no or email ID or URL link which states this. 

  31. Ram says:

    HI Suresh,

    Why banks like HDFC and AXIS bank don't pass the RBI rate cut benefits to its existing custmers directly even if their houseloan is floating . I heard they are asking conversion charges if you want to avail RBI cut interest rate, Is it legal? Where as if RBI increases interest rates then these banks are the first to increase Whether any law is there to avoid?

    Thanks

    Rama

     

    • Suresh says:

      Ram, What I understand is if RBI reduces small rate cut, the benefit is not passed to home loan takers. Such small rate cut would have huge impact on our interest amount. They should not be charging any special charges for that. Please check the terms and conditions where you would have signed the home loan document. 

  32. Prakash S says:

    Dear Suresh

    I am looking for a loan for around 30 Lakhs.  The project which is approved by LIC HFL and i can get the loan quickly.  If i choose to go wtih SBI then i have run around to get it done.

    1. Want to know about MOD registration as LIC representative told me its not required if i opt for housing loan in LIC where as the other banks its mandatory to have and we have to spend around 15000 rupees.

    2. Does this MOD registration applicable for SBI?  Is there any benefit of this?

    Thanks

    Prakash S

  33. Venkatesh says:

    Hi Suresh – I am currently residing in US. Planning to take a flat in bangalore and can you suggest best loan rates in indian banks.

    Property : 85 lakhs , Loan is needed for 60 lakhs.

    Thanks & Regards, Venkatesh.C.M

  34. Priyanka says:

    I am planning to take loan of 29 lakhs from LIC bank. They are charging 7000 plus service tax as processing fees and 10.15% interest rate fixed for 2 years. however i have been offered by ICICI bank with 10.15. % floating interest saying there is employee discount an 3000 plus service tax as processing fees. On top of this I have been offered 1% cash back throughout tenure of loan.

    i am confused because I have already paid processing fees to LIC but 1% cash is real true or it's just some financial arrangement. Pls help In deciding

    • Suresh says:

      Priyanka, Today I got an email from ICICI about similar offer. I was impressed. I noted down so that I can do a deep dive on this. You would see an article by end of this week on this

  35. Ram says:

    Hi Suresh,

    I am planning to take 30 lakhs of loan for a flat purchase.
    I am not able to decide which bank should i go?
    Below are my understading for different lending rates for below banks

    LIC:

    10% fixed for 3 years.

    10.75% fixed for 10 years

    HDFC:

    10.15% floating

    pros: No preclosing charges,
    Property insurance & Personal Insurance (Optional)

    cons:2% penality for balance transfer to other bank.

    AXIS:

    10.15% floating
    pros: No preclosing charges + no penality for balance transfer to other bank.
    Property insurance (Mandatory i.e 10K for 30 lakhs loan) + Personal Insurance [Although agreed for Optional]
    But I afraid after some time they may make it mandatory for me after my home loan is disbursed.

    cons:They might force me to go for Personal Insurance [70K for 30 lakhs insurance]

    Please help me to decide which bank should i go?

    Could you give a graph of floating interest rate change vs fixed interest rate change for various banks for the past 5 years
    for our understanding how much interest varied between past 5 years between floating and fixed interest rate.

    • Suresh says:

      Ram, Such question was asked by one more reader. I researched for some time and gave up. There is no such history available. All home loans have its pros and cons. I checked for SBI Home loans and felt they are good. Please try that. Otherwise you should check HDFC or LIC.

  36. vijay vastrad says:

    hi i am planing to take 30lac home loan from icici with 10.25% intrest. so can any one tell me wheather it is good or i have to go for any other bank?

  37. sudhindra says:

    Thanks Suresh,
    Very useful information. I am planning to take loan of 27 L I think hdfc ois batter then lic as processing fee is 0.5 % less as per above chart and some corporate scheme. Is it right?

  38. Raj Kumar says:

    Dear Suresh,

    I have applied home loan through GIC housing finance and the are offering me 12% fixed for next 5 years, they are given me reason my cibil score is low thats why they are charging high compare to market. In my case i have changed my job in last four months.Loan amount 20 lac.

     

    Regards,

    Raj Kumar

  39. Prabhat says:

    Hi Suresh,

    Thanks for the wonderful article. I am planning to take 40L home loan. Getting LICHFL interest rate of 10% (if co-owned by lady) and SBI interest rate is 10.1% . LIC HFL is offering 10% fixed for 3 years and other option is 10.75% fixed for 10 years. Do you think floating interest rates would be lowered in future? conversion charges at LIC is 2% – i think its too high.

    Many thanks.

  40. Shradha says:

    Hi Suresh,

    We are planning to take loan for flat. We have decided to take it from LIC. Can u suggest whether it would be better to go with LIC or SBI? Can I take loan in my name as female gets lowe interest rate but my salary is less than 4 lakh per annum. Can I show my husbands payslip and take in my name?

     

    Shradha

    • Suresh says:

      Shradha, Yes you can approach bank and indicate that you would be clubbing your husband income to take higher loans. Banks are willing to consider this request. LIC or SBI, both are good. However SBI rates are lower. If you just do simple comparison by asking them the EMI you would know. Small interest rates would make big difference in your outflow.

  41. Bala says:

    Hi,

    First 3 years LICHFL is charging 10.25 % to 10.75%

    After 3 years they will revise the interest rate (10.95 to 12.50%

    ( Current floating interest rate is 11.95%)

    Note:

    Thers is no communication  to the Customer ( Mail/ Letter/phone)

    1. During revise the interest rate
    10.25% to 10.75%
    10.95% to 11.95%

    2. Revise the EMI (14000 to 15500)

    My EMI is not deducted more than 10 days (I blocked only 15:000 for EMI in my bank account)
    ,When I visit the Branch they replied we revised the interest rate, I
    Then I paid the following

    1. EMI Amount
    2. Dishonour charges
    3. Interest for one month

    • Suresh says:

      Bala, Sad to hear your bad experience with LIC HFL. Customer service is one part where many banks and financial institutions fail.

  42. Snehal says:

    It’s a really good article summarizing the top banks. This article serves like ‘One shop stop’.
    You can enrich this article by adding more comments on additional charges like mortgage fees etc.
    Also plz add a column in the table for property insurance. It seems SBI has made property insurance mandatory so mention that and if poss add the % how much they charge for 30lac.
    Also if you have inputs from people you can mention how much time each bank takes to disburse the 1st installment from the time the papers are submitted.
    With these details it will be a more comprehensive article.
    Thanks.

  43. Devendra says:

    Hi Suresh,

    I have taken loan of Rs 9,00,000/- from LICHFL @ 10.70% fixed for 3 years in Aug 2012 for purchase of plot. Now I have taken another loan of Rs 11,00,000/- from LICHFL itself for construction on the same plot @ 10.25% fixed for 2 years in Jun 2103.

    I had taken this loan in a haste and the agent of LICHFL told me that loan for construction can be taken from any other bank also. I always prefer SBI.

    Please advice shall I go for homeloan takeover by SBI or not. And is it feasible the way I am thinking and document requirements.

    • Suresh says:

      Hi Devendra, SBI is offering home loans at < 10% p.a. You should switch over in case you have a choice. Check whether there are any hidden charges or conversion charges. Consider processing fees for SBI into consideration before you swtich over

  44. subathra says:

    Hi suresh,

    We got a home loan of 31 lac + 52,000(insurance) from SBI for 16 years on dec 2010 in the rate of 9% fixed for first 3 years.our EMI is around 31000 . we did a prepayment of Rs 6,70,000 so far.Can you please clarify how this prepayment reflected on our loan in terms of interest and tenure calculations. Is there any way to calculate totally how much principal amount we paid and how many more years we have to pay our EMI?

    Thanks in advance

    Subathra

     

    • Suresh says:

      Subathra, Your SBI bank would have given you statement about hte principal + interest table on how your Rs 31 lakhs needs to be paid. If you have paid partial payment of Rs 6.7 lakhs, the statement would get revised and you should have got it. I would see whether I can provide some calculators in next 2 weeks to comput the way you are asking. Though it would depend on some parameters, let me work on that. But my suggestion is call SBI customer care and they should be able to provide it immly. Have you checked ?

  45. bobby says:

    hi Suresh, i m confused on issue—-  to go for home loan for 35 lac or go for lesser amt i.e 25-30,  n use my PF savings, which one is better option….i m govt employee with 10 yrs bal service……thnaks

    • Suresh says:

      Hi Bobby, It depends. e.g. PF savings are used for retirement savings. Since you are govt employee, you would get good amount of pension after retirement. Is this sufficient for you? If yes, you can use PF savings. Else, you should not touch PF savings as of now. Go to higher loan. Some people even look that PF savings get interest of 8% (approx) whereas you are paying more than 10% for housing loan. People think PF money can be used. Take call based on these facts.

  46. Kiran says:

    Hi Suresh,

    I have opted a HL from SBI @ 9.95% for 20 years & loan amount is 15000 & ECS is going around 14095 appx.I would like to close HL ASAP for which I also did a repayment of 6 lakhs just after ECS started from first month itself.Knowing the fact that initial years EMI goes into interest & later in principle which would be best option to close the HL ASAP doing repayments in 50 thousands in month or lumsum closing amount in lakhs.

    Thanks in advance

    • Suresh says:

      There are two ways of doing this. You can check with your bank whether you can reduce your tenure for home loan. Means instead of 20 years, you can take 10 years. Means your EMI would be doubled. Means instead of 15K, you need to pay 30K. Paralelly you can pay-off as and when you have lumpsum amounts. I agree that in early years, only interest would be collected and principal get repaid in later years of loan tenure.

  47. GOURANGO DAS says:

    i want to take 5 lac as home loan from ICICI bank. what will be the monthly interest for the above mentioned amount?

    • Suresh says:

      Hi Das, I have suggested some of the best rates. You can check with Banks about exact EMI or any other process involved in taking home loan.

  48. Bhavin says:

    Hi Suresh,

    I am looking for a home loan for 20Lacs. Standard Chartered is offering me @9.85%.

    But i do not know much about the trends of this bank. Would it be safe to go ahead with them, considering the long term entitled with home loans?

    Regards,

    Bhavin.

    • Suresh says:

      Standard Chartered is an international bank. Hence you need not worry. Also you are the loan taker, why do you worry. 9.85% is good rate. SBI is offering still lower than this, you can try that oo.

    • Bhavin says:

      Suresh,

      I am worried about the fluctuations that will be seen over the years. I know we dont have control over it, but the past trends would give us a faint picture, isnt it?

      There is consolidated chart of rise and fall in interest rates on SBI website for past 10 years but i could not find any such data for Standard Chartered. Do you have any knowledge with the rate of interest trends associated with Standard Chartered?

      Regards,
      Bhavin.

      • Suresh says:

        Hi Bhavin, Even I could not locate on internet. I am writing an article about floating rate Vs fixed rates and would do some more analysis next week on home loans. It may provide some helpful details to you.

  49. Anandh.R.K says:

    Hi Suresh,

                     Thank you so much for this valuable piece of information on 5 best home loan interest rates in India as I'm in the verge of applying for one.

    Regards

    Anandh

     

  50. Gopal says:

    Hi Suresh,

    In continuation to my previous query, I need one more advice from you.  It's a 2-storeyed house I would construct and in the first phase I would build ground floor and may take a break for 5-6 months before I go for building the 1st floor.  In this situation what would be the best option – apply for the full loan or just the amount I need for ground floor?

    • Suresh says:

      Gopal, You should apply for complete loan as it is only small period of 5-6 months. Banks also would pay you only for the construction work that is done. If you have not constructed 1st floor, they would any how old the loan amount. 

  51. Brijendra Singh says:

    Hi Suresh,

    I have taken home loan of 18 lakh (Floating intrest) in 2008 from HDFC bank on 15 year term. As of today balance principle amount is 13.5 Lakh and EMI intrest is 11.25% . I would like to know that can I change my bank which can provide me lesser intrest rate and if yes then which bank is best and how to approach them (Document requirement?

    • Suresh says:

      Hi Brij, You can do that. But keep this in mind 1) What is the interest difference between the one which you want to opt Vs your current one 2) What are the additional charges you would incur due to this transfer. Based on this you can decide. e.g. SBI is offering home loans at low rate, LICHFL also I understand offering with low rates. Try them.

  52. Gopal says:

    Hi Suresh,

    Thanks for providing important information.  I'm going to take a housing loand of around 22 Lakh for self constuction of house on a vacant land (2 Cottah) which is estimated as 28 Lakh. I tried SBI but it is asking for too many documentations which is a bit diffcult for me to arrange (I have to get few from previous and previous to previous owner of the land).  I'm now in a dilemma to decide between LICHFL and HDFC.  Can you suggest?  In this regard, recently I came to know about something called SLR rate.  The rate that is getting offered by different providers are actually discounted rate.  Does that mean the rate would suddenly jump after some period?  Or I will continue to enjoy the discount difference as the RBI sets the rate?

    • Suresh says:

      Hi Gopal, I do not know what rate they are offering to you for LICHFL and HDFC. I prefer LICHFL and HDFC in order provided if rate of interests are same. Recently, they are offering special discount rates to corporate employees, hence pls check this point. You would continue to get discount on RBI’s rate in future too if you are taking floating rate.  

      • Gopal says:

        The only issue with LICHFL is they are charing 10.25% where HDFC is 10.15%.  Otherwise even the processing fee is a bit lower in LICHFL.  So I was thinking for HDFC.  But in longer run do you think HDFC may be a problem and I would end up paying more? The LICHFL guy claimed that in longer run I will gain only if I choose LICHFL.  I got confused.  Is there any other hidden charge in long run which I have to pay?

        • Suresh says:

          Hi Gopal, all banks charge a fixed higher interest rate on RBI rate and it would vary from bank to bank. I do not know on what basis LICHFL guy says it would be lower in long run? Let me do one thing, I would put-up a article next week and provide a little detailed analysis on floating rate Vs fixed rate so that it would be beneficial for people like you.

  53. Ashok Kumar says:

    Hi Suresh,

    I am opting loan from LIC HFL and the loan value is 35 lacs. They are providing 2 options 2 years fixed 10.25% interest rate and 10 years fixed for 10.95% interest rates.  can you suggest which option is the best. 

     

    Thanks,

    Ashok Kumar R

    • Suresh says:

      Ashok, it would depend on how much they would be charging you after 2 years. e.g. if from 3rd year, they would be charging you for 11% floating rate means this rate would increase or decrease, then this option would be better as first 2 years you anyhow getting 0.70% less rate and from 3rd year, you would be charged 11%.  Currently many banks floating rate is 11% to 11.5%, if you do not want to take risk on rising interest rates, you can opt for optoin-2. 

  54. Sambit says:

    HI Suresh,

    I am planning to take home loan of amount 35lakhs i coming weeks. I like corporation bank compared to any public sector bank as they are quick and I dont have to wait in the queue. I dont like SBI because its very hard to deal with them for me. Please suggest here is it okay to go with Corporation bank? They are offering me 10.50% interest for my amount. And I heard they dont have much hidden charges as compared to private banks.

    One more question is this article is upto date?

    Because I got some attractive home loan offer from ICICI bank(1% Cash back) and Axis bank (Happy ending & one more ). If I will not get loan from corparation bank, I will like to go ahead with a private bank. Please sugggest which is the best private sector banks for home loan at today's date. 

    Anyways thanks for this post, I have got some good idea about home loan now.

     

    Thanks,

    Sambit

    • Suresh says:

      Sambit, this article is written in Mar-13 and I do not see much changes in the rates. But you can enquire with bank for any latest rates. 10.5% interest rates from corp bank would be good. In pvt. bankiing Axis is offering some good benefits now for limited period, you can try that. Consider addl charges which you need to pay when you take home loan

      • Sambit says:

        Hi Suresh,

        I am taking around 35 lakhs loan from Corporation Bank with 10.25% interest and NO processing fee. Corp guys are very good and co-oprative. Being a public sector bank with such offer. I will highly recomend this bank for home loan.

        Thanks,Sambit

  55. Shweta says:

    Hello Suresh, I am planning to take a Loan upto 36lacs but in dilemma which bank i should go for SBI,HDFCand LIC. Would like to get your opinion.

     

    Thanks,

    Shweta

    • Suresh says:

      Shweta, Look at 2 points. Low interest rates + low or zero processing fees. Interest rates of 0.10% would make a huge difference for your overall outflow. Since the special interest rates are offered to various corporate employees, I cannot comment which is better. In case you are still not able to decide about this, please provide the info to me as a follow-up comment, I would help you.

  56. Nidhi says:

    Hi Suresh,

    I have a housing loan and planning to close it ASAP , however could you please help me if I should prepay the principal in 4 installments or doing that in one final payment would be ok. 

    I am not filing for any taxes in India as I am working abroad, so there are no tax benefits for me.

    Appreciate your time and suggestion.

    Thanks,

    Nidhi

     

    • Suresh says:

      Hi Nidhi, It depends on the tenure available to close. For e.g. if you have taken 20 years loan period and if you are within 5 years, all you are paying is only interest, but not principal repayment. But if you are at the end loan period, you are paying majority of principal and less of interest. My suggestion is if you already made up your mind to close loan, it is immaterial to check  whether it is 1 or 4 instalments. You can go ahead and close it now.. 

  57. DR. MOHD JAWAD says:

    MR. SURESH, I HAVE A HOME LOAN FRON HDFC, AND PAYING EMI S, IS IT AGOOD IDEA TO PREPAY SOME  OF PRINCIPAL BALANCE AMOUNT REGULARLY , APART FROM EMI S, OR PRECLOSE AT EARLIEST. WHAT DO U SUGGEST WHAT IS THE BEST OPTION TO CLOSE MY HOME LOANS ?

    RGDS

    • Suresh says:

      Hello Dr. Jawad, If you have completed first 2-5 years of loan tenure, majority of interest is already recovered by your bank. You may not benefit much if you want to close at that point of time. In such case make the partial payments and reduce the tenure instead of closing them. You would still get the tax benefits.

  58. Varinder Singh Sohal says:

    Dear Suresh,

    Hi Suresh ! I took loan for constructing my house last year from UNION BANK OF INDIA for Rs. 12 Lakh. Now I want to increase the limit upto Rs. 5 Lakh more. The bank manager has been delaying the things on one pretext or another since quite a long time. I need the money immediately before 28th of this month. Can you suggest something

    Thanks

    Regards

    Sohal

    • Suresh says:

      Hi Varinder, You need to check on what basis the bank manager is delaying your top-up loan. If any documentation formalities needs to be done, it would be your responsibility to do it. That should be your first step. Second step is, you should contact the “regional manger” of the bank. I feel your problem should get solved in this second step. In case you still have any any problem, mail me your contact details to suresh@myinvestmentideas.com, I can also try from my end.

  59. Ravikumar N says:

    Dear Suresh,

    Currently most of the banks are not extending any interest rate cut benefits to the new customers. For eg., I have taken home loan from Corporation bank and currently I am paying 11% interest rate, but for new customers they are offering home loan interest rate at 10.25% only and there is no option available for me to switch to the lowest interest mode with in the bank. I heard, SBI is allowing its existing customers to switch to the new interest rates. Please provide me some info on this.

    Thanks

    Ravi N

    • Suresh says:

      Ravi, SBI and few other top banks are offering such switch option. There are some charges for conversion, however they are small comparing to interest savings. I understand SBI is also doing balance transfer from another bank. Why don’tyou try and save money ?

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