There are at least 15 banks and four housing finance companies that are currently offering home loans starting at under 7% p.a.
The Reserve Bank of India’s decision to continue with a low repo rate of 4% in a bid to counter the economic fallout of the prevailing Covid-19 pandemic has majorly contributed towards most banks reducing their home loan interest rates to multi-decade lows. In fact, there are at least 15 banks and four housing finance companies (HFCs) that are currently offering home loans starting at under 7% p.a.
This low-interest trend makes it an opportune time for aspiring home loan borrowers — provided they have sufficient margin funds, a credit score over 750-800 and an adequate repayment capacity. One needs to carefully consider all these factors because many aspiring borrowers would have a high loan quantum requirement, especially if they plan to buy a house in a metropolitan city.
So, if you have a big-ticket loan requirement, do note that the highest permissible loan-to-value (LTV) ratio could be slightly lower in your case compared to someone who has a lower loan amount requirement. Meaning, you might be allowed a loan up to 75%-80% of a high-value property (say, worth Rs.1 crore or above) as opposed to a more affordable property where the maximum permissible LTV could go up to 90% of the property’s value, according to BankBazaar.
Also, many lenders may charge a higher interest rate for high-value loans compared to lower loan amounts. You’ll be, thus, well-advised to carefully evaluate your margin fund requirements as well as the affordability of the loan EMIs after comparing your options based on your eligibility and requirements before finalizing your decision.
If you’re unsure about whether to take a home loan from a bank or a housing finance company, do note the latter usually have slightly higher interest rates than banks but they could be better suited for high loan quantum requirements. HFCs are NBFCs that specialise in home loan products unlike banks that have multiple credit products. However, bank floating rate home loan interest rates are linked to an external benchmark like the repo rate while HFCs peg their interest rates to their prime lending rate, as per BankBazaar.
So, if you’re looking to apply for a high-value home loan, here is a list of 10 banks and 10 HFCs — including Axis Bank, Kotak Mahindra Bank, PNB, UBI, HDFC Ltd, and LIC Housing Finance Ltd — that are currently offering the lowest interest rates for loans above Rs 75 lakh in the country. Do note, the interest rate applicable to you would be determined based on your age, gender, income, credit score, loan quantum, LTV ratio, or any other terms and conditions of your chosen lender.
Banks and HFCs currently offering the cheapest floating rate home loans of Rs.75 lakh and above
Disclaimer: Data taken from respective bank’s websites on May 7, 2021. Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.
#Home loan data of HDFC Ltd provided by HDFC Ltd