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Business News/ Money / Personal Finance/  Top 5 banks offering low interest rates on home loans; check full list
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Top 5 banks offering low interest rates on home loans; check full list

SBI offers home loans in the range of 9.15 percent to 9.65 percent based on the CIBIL score. The higher the score, the lower the interest rate. When the CIBIL score is above 750, the bank charges 9.15 percent and when the score is between 550 to 649, the bank gives loan at 9.65 percent

Most top banks charge interest rate in the upward of 9 percent per annum on home loansPremium
Most top banks charge interest rate in the upward of 9 percent per annum on home loans

Before you decide to buy your dream house, it is important to check the interest rate most banks charge on their home loans. Even a marginal difference in the interest rate can lead to a significant difference in the total cash flow over a period of time.

For instance, when you borrow 50 lakh for 15 years, interest rate of 9 percent and 9.5 percent can lead to total cash outflow of 96.71 lakh and 99.48 lakh respectively, i.e., a difference of 2.77 lakh over the loan tenure.

This is why a little difference in the rate of interest can lead to a significant difference in the cash outgo later on.

ALSO READ | A home loan top-up can help borrowers get extra funds, says Kathuria of Easiloan

Top banks offering lowest interest rates

HDFC Bank: HDFC Bank offers special interest rates in the range of 8.75 percent to 9.65 percent. The standard interest rate is between 9.40 percent to 9.95 percent. So, the lowest interest rate that the bank charges on home loan is 8.75 per cent and it goes up to 9.95 percent.

ICICI Bank: ICICI Bank charges two categories of interest rates on its home loans: special and standard interest rates.

Special rates: The bank charges interest rates in the range of 9 to 9.10 percent per annum based on the CIBIL score. For instance, when the credit score is 800, the bank charges 9 percent and when the score is between 750 to 800, the interest rate is 9 percent for salary borrowers and 9.10 percent for self-employed ones. These rates will be valid till May 31, 2024.

Special interest rates charged by ICICI Bank.
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Special interest rates charged by ICICI Bank.

Standard rates: These rates range between 9.25 percent to 10.05 percent based on the loan amount. When the loan amount is below 35 lakh, the interest rate is between 9.25 per cent to 9.65 percent. For loans between 35 to 75 lakh, interest rate is 9.5 to 9.95 percent, as the table below shows.

Standard interest rates charged by ICICI Bank on home loans.
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Standard interest rates charged by ICICI Bank on home loans.

State Bank of India (SBI): SBI offers home loans in the range of 9.15 percent to 9.65 percent based on the CIBIL score. The higher the score, the lower the interest rate. When the CIBIL score is above 750, the bank charges 9.15 percent and when the score is between 550 to 649, the bank gives a loan at 9.65 percent. These rates came into effect from May 1, 2023 onwards. 

Interest rates charged by SBI on home loans are based on the CIBIL score of borrowers.
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Interest rates charged by SBI on home loans are based on the CIBIL score of borrowers.

Kotak Mahindra Bank: The private lender charges an interest rate starting 8.70 percent for salaried persons and 8.75 percent for self-employed. These are the minimum interest rates and the actual rate may be higher than this.

ALSO READ | Want to take a home loan overdraft facility? Here are its pros and cons

Bank of Baroda: The state lender charges floating interest in the range of 8.40 percent to 10.60 percent from salaried as well as non-salaried persons. 

Those opting for fixed rate are charged interest rate in the range of 10.15 percent to 11.5 percent if they are salaried borrowers, and 10.25 percent to 11.60 percent if they are non-salaried.

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Published: 16 May 2024, 03:30 PM IST
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