Check the latest home loan interest rates offered by lenders on Bajaj Markets.
While a feasible loan offer can help you buy or construct your dream house, knowing the current house loan interest rates and associated charges is essential. With this information, you can plan your budget effectively and decide on an affordable repayment plan. On Bajaj Markets, you can get some of the best house loan interest rates starting from just 7.49% p.a.
Here is a list of the current home loan interest rates, maximum loan amounts, and tenures offered by lenders that have partnered with Bajaj Markets:
Lender |
Starting Interest Rate |
Maximum Loan Amount |
Maximum Tenure |
Bajaj Housing Finance |
7.99% p.a. |
₹15 Crores |
32 Years |
Home First Finance Company |
9.00% p.a. |
₹40 Lakhs |
20 Years |
ICICI Bank |
9.00% p.a. |
₹5 Crores |
30 Years |
India Shelter |
13.00% p.a. |
₹40 Lakhs |
20 Years |
Kotak Mahindra Bank |
9.00% p.a. |
₹50 Lakhs |
20 Years |
L&T Finance |
8.60% p.a. |
₹7.5 Crores |
25 Years |
LIC Housing Finance |
8.65% p.a. |
₹15 Crores |
30 Years |
PNB Housing Finance |
8.50% p.a. |
₹15 Crores |
30 Years |
Sammaan Capital |
8.75% p.a. |
₹5 Crores |
30 Years |
Shriram Housing Finance |
11.50% p.a. |
₹1 Crore |
25 Years |
Shubham Housing Finance |
10.90% p.a. |
₹50 Lakhs |
25 Years |
Vridhi Home Finance |
12.00% p.a. |
₹25 Lakhs |
12 Years |
South Indian Bank |
8.50% p.a. |
₹15 Crores |
30 Years |
Easy Home Finance |
10.50% p.a. |
₹50 Lakhs |
20 Years |
Disclaimer: Interest rates and loan terms are subject to change based on the lender’s policies and prevailing market conditions.
When planning your loan, it is essential to assess the home loan rates carefully and understand what suits your financial profile best. This becomes even more relevant when you are comparing the different home loan interest rates in India, as they differ based on lender and borrower profiles.
To calculate the interest charged on your home loan, you can use the formula provided below:
Interest = (Loan Amount x Interest Rate x Tenure)/100
Let’s understand this better with the help of an example. Assume you took a home loan of ₹50 Lakhs for a tenure of 20 years. The interest rate for the loan is 8.50% p.a. In this case, the interest charge for the loan will be:
Interest = (5000000 x 8.50 x 20) / 100
= 850000000 / 100
= ₹8500000
The interest charged on your loan majorly depends on the interest rate of the loan. Depending on your loan eligibility, an effective interest rate (EIR) is offered to you. Let’s look at how lenders calculate this rate.
Previously, the home loan interest rate was calculated with the help of the following formula:
Effective Interest Rate = Base Rate + Markup
The base rate is the minimum rate set by RBI and other central banks worldwide which financial institutions use to lend money to their customers. Meanwhile, the markup is a small percentage which can be adjusted by the lender to accommodate the lending cost and the borrower’s financial situation. The markup is decided by the lender as per the type of loan they opt for. This rate is added to the base rate, resulting in the effective interest rate which is charged on the loan.
However, in April 2016, RBI introduced the Marginal Cost of Funds Based Lending Rate (MCLR). The formula to calculate the MCLR is as follows:
MCLR = Marginal Cost of Funds + Negative Carry on Cash Reserve Ratio + Operating Costs + Tenure Premium
As seen in the formula, the MCLR accounts for all the operational and other additional costs lenders incur. It ensures that the interest rate is fair to both the lender and borrower. This changed the way interest rates are calculated by replacing the base rate used for the calculation. The MCLR-based rates are revised regularly as per changes in RBI regulations and policies. This provides greater transparency to the borrower. The MCLR varies depending on the tenure the borrower selects and is generally lower than the former base rates.
There are two types of home loan interest rates that you should know about:
The fixed interest rate is set by your lender at the start of the loan tenure. This rate remains constant throughout the repayment period. It becomes easy to plan and budget your loan repayments as the interest charge remains the same over the tenure and so does the EMI. This brings a sense of stability and predictability in loan repayment. It makes it easier to plan for prepayments and foreclosure. It is beneficial for those with a lower risk appetite.
A floating interest rate is dynamic and is revised regularly on the basis of changes in macroeconomic conditions. The rate is linked to a benchmark rate like repo rate or the MCLR. As these rates change, so does the interest rate of your loan. The advantage of this interest rate is that it is lower than the fixed rate. Additionally, if the market trends are favourable, the rate may drop further, leading to lower interest charges, helping you save money on your EMIs. However, the risk of the rate surpassing the fixed rate during periods of inflation and recession also remains. Thus, it is important to keep a close eye on the market trends and constantly monitor them when opting for a floating interest rate.
In case you wish to switch the type of your home loan interest rate, you can do so for a minimal charge. This can help you strategically save more and enjoy the benefits both types of interest rates offer. Reach out to your lender for further details.
Choosing between a fixed or floating interest rate can significantly impact your total loan cost and monthly budget. Here is a comparison to help you understand the key differences between the two options:
Parameter |
Fixed Interest Rate |
Floating Interest Rate |
Interest Rate Behaviour |
Remains unchanged throughout the loan tenure |
Changes as per market trends and benchmark rates (e.g. repo rate or MCLR) |
Monthly EMI Stability |
EMIs remain fixed, offering stable monthly payments |
EMIs may go up or down depending on rate fluctuations |
Ease of Financial Planning |
Easier to budget due to consistent payments |
May require flexible budgeting due to varying repayments |
Starting Interest Rate |
Typically higher than floating rates (by 1% to 2.5%) |
Generally lower in the initial stages |
Effect of Market Changes |
Unaffected by changes in repo rates or economic conditions |
Directly impacted by RBI policies and broader market movements |
Benefit from Falling Rates |
No benefit from rate reductions |
May benefit from lower rates when market conditions improve |
Level of Risk |
Low risk – suitable for those preferring repayment certainty |
Higher risk – better for those comfortable with changes in repayment amounts |
Conversion Flexibility |
Can switch to floating by paying a fee (as per lender terms) |
Can switch to fixed by paying a conversion fee |
Here are factors which may have a major impact on your home loan interest rates:
Lenders usually assess your credit and repayment history with the help of the credit score. Most lenders consider the score issued by TransUnion CIBIL to check your creditworthiness. A CIBIL score of 750 or more can enhance your loan eligibility, enabling you to benefit from a lower interest rate.
The lower the loan amount, the lower the risk related to the loan for the lender. This usually incentivises the lender to offer you lower interest rates. So, consider borrowing only the amount you need and can repay easily.
If you opt for a floating interest rate, the rate offered is usually lower than a fixed interest rate. This can help you save on the interest charges of your loan. However, note that the floating interest rate is subject to change due to fluctuations in the market rates. They may surpass the fixed rate in case of inflation or any other economic crisis. Thus, it is essential to closely monitor the market rates and trends before choosing the interest rate. Ensure to thoroughly assess the total probable cost of the loan before selecting the type of interest rate.
Having a stable income shows that you have the required repayment ability, making the lender more willing to offer a low interest rate. Similarly, having steady employment assures the lender of your income source enabling you to get favourable loan terms.
Women are likely to get concessions and lower interest rates on a home loan. This can help you save majorly on your loan’s total repayment costs. You can also get discounts on the stamp duty charges which leads to additional savings.
Even a small reduction in your home loan interest rate can lead to significant savings over time. Here are some effective ways to help lower your home loan interest burden:
A strong credit score (750 or above) reflects good repayment behaviour and improves your chances of getting a lower interest rate. Regularly checking your score and addressing any errors can also make a positive difference.
Choosing a shorter repayment period reduces the overall interest paid, even if your EMIs are slightly higher. If financially feasible, a shorter tenure can be more cost-effective in the long run.
If your loan agreement allows, try making part-prepayments whenever you have extra funds. This helps reduce the outstanding principal and the total interest outgo over time.
If your financial profile has improved since you took the loan (better credit score, higher income, etc.), you can approach your lender for a lower rate. Some banks allow you to shift to a lower rate slab by paying a nominal fee.
If another lender offers a lower interest rate, you can transfer your outstanding loan amount to them. This option is useful when the interest rate gap is significant, and the cost of transfer is justified.
During periods of falling interest rates, opting for a floating rate can help you benefit from market-linked rate reductions. Keep an eye on the repo rate and market trends to decide the right time to switch.
Getting a favourable home loan interest rate can make a big difference in your long-term financial planning. Here are some practical steps you can take to secure the best possible rate:
Lenders usually offer the lowest rates to applicants with high credit scores, typically above 750. Make timely repayments, reduce credit card balances, and avoid frequent loan applications to maintain a healthy score.
Don’t settle for the first offer. Use online marketplaces or visit different banks to compare home loan rates, processing fees, and overall loan terms before deciding.
Including a co-applicant with a stable income and good credit score can improve your loan eligibility. This may increase your chances of getting a better rate.
If you can afford it, pay a larger share of the property’s value upfront. A lower loan-to-value (LTV) ratio reduces the lender’s risk, which may translate into a better rate.
Understand the pros and cons of fixed and floating interest rates. Choose one based on current market trends and your financial comfort with changing EMIs.
Lenders favour applicants with a steady job history and reliable income. If you work with a reputed organisation or have a consistent business income, you may be eligible for better terms.
Once you have compared options and built a strong application, don’t hesitate to negotiate. Lenders may be open to offering a better rate, especially to well-qualified borrowers.
The home loan interest rate is the cost of borrowing the loan. It is a percentage applied to the principal amount that a lender charges. In simple terms, the interest rates dictate your cost of borrowing.
The home loan interest rates of various banks and NBFCs vary depending on their policy, the benchmark rate they follow and other factors.
When applying for a home loan, you can opt for either a fixed or a floating interest rate. The first, as the name suggests, is fixed beforehand and remains the same throughout the loan tenure. On the other hand, if you choose a floating interest, then the rate will be revised on a quarterly basis. This will be on the basis of the repo rate and other economic factors.
A home loan interest rate has two components: base and markup rates. While paying your home loan interest dues, you will be paying a combination of these variables, i.e., Effective Interest Rate (EIR) = Base Rate + Markup.
The base rate is the standard rate levied against all retail loans and varies as per the lender's policy. The markup rate is the profit markup of the lending institution and varies for each type of loan and the lender.
You can reduce your home loan interest rates in several ways. Enhancing your credit rating and score can help you showcase healthy credit behaviour. This allows lenders to offer you competitive rates.
You can also apply for government-run housing schemes such as Pradhan Mantri Awas Yojana (PMAY) to get interest subsidies. Home Loan Balance Transfer Facility can also help you access lower rates if you have an existing home loan.
The standard NBFC or bank home loan interest rates are fixed by the institution based on their policy, market trends, and the RBI’s rates. It is also dependent on your credit profile and loan terms.
Floating home loan interest rates are those that change during your repayment tenure. The change in your floating rate occurs when there is a change in the lender’s interest rate.
A higher loan-to-value (LTV) ratio typically indicates that the loan amount funds most of the house purchase. This increases the risk the lender is undertaking because if the borrower defaults, the lender will lose significantly.
To calculate the home loan interest rate amount before applying, you can use the home loan EMI calculator. Use it before you apply for the loan, and check the amortisation schedule for the complete and detailed breakup.
Remember that the result you get using the calculator will be an estimate and may change when you start repaying. However, you can use the tool to compare the rates and choose the best option.
Yes, most lenders allow you to switch from a fixed home loan interest rate to a floating rate and vice versa. Note that you may need to pay a minimal fee for the same.
Yes, under Section 24 of the Income Tax Act, you can claim a deduction from your income of up to ₹2 Lakhs for the interest paid on the home loan in a financial year.