Buying a home in cities like Delhi or Mumbai often requires a home loan.
Thanks to the Reserve Bank of India (RBI) cutting the repo rate by 1.25% last year, interest rates on home loans have dropped significantly.
Government banks now offer home loans at rates as low as 7.10%, making it easier for first-time buyers to invest in property.
Some housing finance companies also provide loans at 7.15%, giving borrowers multiple low-cost options.
Government Banks Lead in Low-Cost Home Loans
Public sector banks are offering the cheapest home loans, helping customers save on interest over long-term loans. Here are the top banks:
Bank of India: Offers home loans between ₹30 lakh and ₹75 lakh at 7.10–10%, and loans above ₹75 lakh at 7.10–10.25%.
Bank of Maharashtra: Home loans from ₹30 lakh to ₹75 lakh start at 7.10–9.90%.
Indian Overseas Bank: Provides home loans at a flat 7.10% interest rate.
Central Bank of India: Offers loans between ₹30 lakh and ₹75 lakh at 7.10–9.15%.
UCO Bank: Home loans in the range of ₹30 lakh to ₹75 lakh come with rates of 7.15–9.25%.
These banks are ideal for borrowers looking for affordable, long-term home financing.
Private Banks Still Higher
Private banks have not matched the low rates of government lenders. For example:
HDFC Bank: Interest rates start at 7.90%.
ICICI Bank: Rates begin at 7.65%.
Axis Bank: Loans start at 8.35%.
While private banks often offer faster processing and additional benefits, their interest rates remain higher, making government banks the go-to option for cost-conscious borrowers.
With interest rates at historic lows, now is a great time to plan your home purchase.
By comparing rates from government and private banks, buyers can save lakhs of rupees over the loan tenure.