Best Home Loan Interest Rates in India 2023

A home loan is a specialized finance facility that a bank provides to the user where a big amount is offered for purchasing a property in return for interest.

You can purchase a property with this loan and get to own your dream home. It is a long-term loan for which you’ll have to pay an EMI every month to slowly settle the debt.

Houses are extremely expensive and generally, people do not have access to that kind of cash therefore, they get their home purchase financed by the Bank or any other financial institution.

There are various loan providers in the market offering interesting interest rates on the home loan. In this list of Home Loans, you can find the list of home loan rates at which the bank currently offers the home loan to the individual.

Before finding the list of best home loan interest rates in India 2023 let’s learn how to calculate interest on Hoe Loan, Types of Interest rates, etc.

Best Home Loan Interest Rate in India

Best Home Loan Interest Rates in India 2023

Bank NameFloating Interest ratePer lac EMIProcessing FeePrepayment Charges
SBI – State Bank Of India8.60% – 9.40%Rs.874 – Rs.926Nil till 31.03.2023Nil
ICICI Bank8.75% – 9.80%Rs.884 – Rs.9522999+GST for CIBIL Score above 700, .50% + GST for Score below 700N.A
HDFC Ltd8.65% – 9.35%Rs.877 – Rs.9223000 + Tax (Salaried), 5000 + Tax (S. Employed)Nil
LIC Housing8.65% – 10.25%Rs.877 – Rs.982Below 1 Cr: Upto Rs.10000 + ATNil
Above 1 Cr: Rs.20000 + AT
Bank of Baroda8.45% – 9.80%Rs.865 – Rs.952Up to 0.5 % of loan amount + GSTN.A.
AXIS Bank8.60% – 9.05%Rs.874 – Rs.903Up to 1% of the Loan amount subject to a minimum of Rs.10,000/-Nil
PNB Housing Finance8.50% – 10.35%Rs.868 – Rs.9880.50% Or 10,000 + GST, whichever is higher.NIL
India Shelter Housing Finance11.99% – 18.00 %Rs.1100 – Rs.02% – 3%(Including GST)NIL
DMI Housing Finance12.00% – 18.00%1.5% + GSTNIL
IDBI8.00% – 11.15%Rs.836 – Rs.1042NILNil
Union Bank of India7.90% – 9.60%Rs.830 – Rs.9390.50% of loan amount subject to a maximum of 15000 + GSTNIL
Bank of India7.80% – 9.65%Rs.824 – Rs.9420.25% of loan amount Min. Rs.1,000/- and Max. Rs.20,000/-Nil
Piramal Housing Finance0.095Rs. 9320.10% – 0.25% (GST)N.A
L&T Housing Finance0.0835Rs.8580.25% plus taxes (for salaried & for self-employed)NIL
Tata capital Housing Finance ltd0.0775Rs.821 – Rs.0Up to 0.5% of loan amount + GSTN.A
HSBC Bank7.44% – 7.55%Rs.802 – Rs.809N.ANil
Federal Bank9.05% – 9.20%Rs.903 – Rs.913Upto Rs.7500 + GSTN.A
Allahabad Bank7.40% – 8.15%Rs.799 – Rs.846N.ANIL
Central Bank of India6.85% – 7.30%Rs.766 – Rs.7930.50% of the Loan Amount subject to a maximum of Rs.20,000/-Nil
UCO Bank7.15% – 7.25%Rs.784 – Rs.7900.5% of the loan amount, minimum Rs.1500/- & maximum Rs. 15000/-NIL
Canara Bank8.60 %- 10.80%Rs.874 – Rs.10190.50% of loan amount + GST
Kotak Bank8.30% – 8.90%Rs.855 – Rs.893Upto 1.25% of the Loan amountNil
Citibank8.50% onwardsRs.868 onwardsRs. 5000 (Application fee)NIL
Oriental Bank of Commerce7.00% – 7.60%Rs.775 – Rs.8120.50% of the loan amount, subject to a maximum of Rs.20000/- plus GSTNIL
Indian Overseas Bank8.45% – 8.70%Rs.865 – Rs.8810.50 % (max. Rs.25,000/-)N.A 
Indian Bank8.40%- 8.50%Rs.862 – Rs.8680.230% on loan amount + GST or Max Rs.20470/-Nil 
Punjab National Bank8.40%- 9.55%Rs.862 – Rs.9350.50% of loan + GSTNIL 
Bank of Maharastra7.80% – 9.70%Rs.824 – Rs.945As per applicableNil 
GIC Housing Finance0.082Rs.849 – Rs.0Rs.2500 + GSTN.A 
India Infoline Housing Finance Ltd.0.09Rs.900Up to 1% of loan amount + GSTN.A 
Karnataka Bank8.24% – 10.31%Rs.851 – Rs.986N.AN.A 
Reliance Home Finance Private Ltd.9.75% – 13.00%Rs.949 – Rs.1172Up to 2% + GSTN.A 
Repco Home Finance Ltd.7.70% – 10.40%Rs.818 – Rs.9921% of loan amount + GSTN.A 

How to Calculate Interest on Home Loan?

To calculate interest on the home loan, you’ll have to evaluate various factors which help you calculate the interest amount on the home loan calculator.

The following are the factors that affect the Interest rate amount-

  • Loan amount
  • Tenure
  • Interest rates

The formula for Calculating the Home Loan Interest Rate

The following is the formula for calculating the home loan interest rate-

P x R x (1+R)^N / [(1+R)^N-1], where-

P = Principal loan amount

N = Loan tenure in months

R = Monthly interest rate

R = Annual Rate of interest/12/100


Let’s say, A bank is offering you a loan of Rs.50 Lakhs for a 9.2% interest rate for 10 years. The calculation of the home loan is as follows-

When we imply the above data into the formula for finding the home loan EMI, i.e., 50,00,000 x 9.2% x (1+9.2)^10/(1+9.2)^10-1

The monthly EMI is calculated as Rs.63,880/-per month which you must pay for 10 years to the bank.  

Note- To calculate your home loan you can use the Mudra Nidhi home loan calculator

Types of Interest rates

There are two types of interest rates that a bank or financial institution provides you to choose from for getting the loan, which are explained as follows-

Fixed Interest Rate

Fixed Interest rates are those rates that are fixed in nature which are predefined and do not change during the tenure of the loan.

The entire structuring of this interest rate is fixed and no alteration can be done during the tenure which helps in determining the cost during the entire period.

Determining the fixed cost that you’ll have to bear helps in financial planning and no matter what the financial condition of the economy would be, you’ll have a fixed cost to bear. Due to this reason, the fixed interest rates are 1-2% higher than the floating interest rates.

Floating Interest Rate

Floating Interest rates are those that may vary from time to time and it highly depends on the RBI’s base rate.

RBI is the central bank of India which develops the monetary policy to aid the country in maintaining economic advancement.

To manage that RBI, lends the money itself to the banks so that the banks can further lend that money to the end users.

Floating interest rate charges with base rate + the interest decided by the bank. The base rate is the variable element that changes from time to time.

RBI decides the base rate depending on various factors like economic performance, inflation rate, the money supply in the market, etc.  

Which one to choose: Fixed Interest Rate or Floating Interest Rate?

Fixed Interest rates are a preferred choice of many as the fixed interest rate provides the end user with an assurance that whatever the market condition is, the fixed cost of the loan will not change.

On contrary, floating interest rate changes from time to time which might enforce pressure on your cash flow from time to time.

In general, if the loan amount is big and the payment tenure is also long then you should always go for a fixed interest rate and if the tenure is small and the loan amount is moderate to low then you can choose a floating interest rate.

In India, the inflation rate is generally 3-4% which keeps the economy growing well, however, during times of economic difficulties like COVID or depression, the inflation rate increase which affects the floating interest rates.

The above mention practice will help you in playing safe during any economic difficulty as generally, the economic performance of a country can be anticipated for a year or two in advance, and keeping the amount lower will not adversely affect your cash flow during the time of economic difficulty.


Is a credit score required to avail Home Loan?

Yes, a credit score is required to avail of the Home Loan. The chances of getting a loan from a reputed bank increase with a higher CIBIL score.

What are the documents required to apply for a Home loan?

The following documents are required to apply for a Home Loan-
Loan application form.
3 photographs passport sized.
Identify proof
Residence proof
Bank Account Statement/Passbook for the last 6 months.
Signature verification by bankers of the applicant.
Liabilities statement and Personal Assets.
Property detailed documents
Salary Certificate (original) from the employer. (salaried individuals)
Form 16/IT Returns for the past 2 financial years. (salaried individuals)
IT Returns/Assessment Orders copies of the last 3 years. (self–employed professionals)
Challans as proof of Advance Income Tax payment. (self–employed professionals)
Proof of business address for non-salaried individuals. (self–employed professionals)
IT returns/Assessment Orders copies of the last 3 years. (Self–Employed Businessmen)
Challans as proof of Advance Income Tax payment. (Self–Employed Businessmen)

Is pre-closure or part prepayment allowed in Home Loan?

Yes, you can pre-close your home loan account with the bank by paying all the amount. If you have a surplus amount with your then you can close your loan amount easily.

Does the bank charge any pre-closure charges on my Home Loan?

Yes, the bank charges a preclosure fee which has to be paid by the borrower to the bank in addition to the loan principal amount left.  

How to get the best interest rate from the bank?

To get the best interest rate from the bank, the borrowers are required to have a good CIBIL score along with strong and error-free documentation. You can also check for the MudraNidhi compilation of Home Loan Interest Rates in India 2023 which will guide you on applying for the best home loan for your home.