Monday, December 1, 2014

Looking to buy that elusive dream home for your family? What are the home loan rates in India?

Author: Sachin Gupta | Find me on Twitter

Looking to buy that elusive dream home for your family? Even after identifying the location and builder, the next big question is home financing. Which bank to approach and what are the current home loan rates that are offered by these banks? These are some of the questions that need clarification. At the same time, one might begin to wonder what, if any, are the basic differences between various home loan products offered by banks.

Here we help you in clarifying those questions:

Types of mortgage loan:


  • Fixed Rate Mortgages - Constant Payment Mortgage Loan (CPM):

In this type of loan, the interest rate remains fixed during the tenure of loan. Rate of interest is normally higher in these types of Loans.


  • Fixed Rate Mortgages – Graduated Payment Mortgages (GPM)

Some individuals have less income in starting years of their careers; those individuals are not considered for loan. To overcome this effect, lenders have designed a mortgage loan that retains a fixed rate of interest but includes a series of stepped up payments that are lower in earlier years, thereby better matching borrower’s incomes, and then rising over time.


  • Adjustable (Floating) Rate Mortgages (ARM) also known as Floating Interest Rates:

These mortgages provide an alternative method of financing through which lenders and borrowers share the risk of interest rate changes. In this type of loan, since interest rates are adjustable, they are indexed to say wholesale price index (WPI) or other market interest rates.


  • Hybrid Adjustable Rate Mortgages

This is the most common type of mortgage loan used these days. Hybrid ARMs combines elements of fixed rate mortgages for periods of 3, 5, or 7 years, after which interest rates are reset and the loan becomes an ARM.

Read here for more on Home Loan interest rates and the process of securing home loan in India.


Interest Rates in India – Dated November 28th 2014.

Loan upto Rs 75 Lakh (Floating Interest Rates)
Bank Amount Tenure (Years) Interest Rate (%)
HDFC Ltd Up to Rupees 75 Lakh Up to 20 years 10.15
ICICI Ltd Up to 10 years 10.15
State Bank of India (SBI) Up to Rupees 75 Lakh Up to 20 years 10.15
Punjab National Bank (PNB) Up to Rupees 75 Lakh Up to 20 years 10.25
Punjab National Bank (PNB) Above Rupees 75 Lakh Up to 20 years 10.5
Axis Bank Up to Rupees 75 Lakh 10 Years 10.15
Bank of India Up to Rupees 75 Lakh Up to 20 years 10.2
Canara Bank Up to Rupees 75 Lakh Up to 20 years 10.2
Union Bank Up to Rupees 75 Lakh Up to 30 years 10.25
Dewan Housing Finance Corporation Limited (DHFL) Rs 30 Lakh - 75 Lakh Up to 20 years 11

Loan Above Rupees 75 Lakh (Floating Interest Rates)
Bank Amount Tenure (Years) Interest Rate (%)
HDFC Ltd Up to Rupees 75 Lakh 10 10.15
ICICI Bank Rs 75 Lakh - 5 Crore 20 10.5
State Bank of India (SBI) Up to Rupees 75 Lakh Up to 20 years 10.15
Canara Bank Above Rupees 75 Lakh Up to 20 years 10.45
Union Bank Up to Rupees 75 Lakh Up to 30 years 10.25

Note: Floating Rates changes as and when bank changes their base rates. There are also other kinds of interest rates that bank offer such as 2 year fixed interest rates or 3 year fixed interest rates as described above. Contact your bank for those kind of home loan interest rates.





Have any Questions?

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