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What Are The Latest Housing Interest Rates in India?
12 Jun 2019

Home loan interest rates usually vary between financial institutions. Financial institutions decide on a particular rate of interest depending on the MCLR determined by the repo rate announced by the Reserve Bank of India at periodic intervals.

The latest home loan interest rate averages between 9-10% with some of the government-backed financial institutions offering lower rates to borrowers. RBI agrees on a minimum interest rate for the various financial institutions offering such credits. Also, there is no maximum limit pre-determined by the financial bodies in India. An open and competitive market provides fair competition between lenders to keep their interest rates within an affordable limit.


  • Housing Loan Interest Rates - Home loan interest depends on several parameters. The occupation of an individual will affect the applicable rate. Financial institutions offer floating interest rates as low as 8.80% on loans of up to Rs. 30 Lakh. Similarly, a self-employed individual can enjoy rates as low as 9.35%.

Such an affordable interest rate makes home loans available for a wider gamut of prospective borrowers. They can also get home loan interest tax benefits of up to Rs. 2 Lakh under Section 24 and tax deduction of up to Rs. 50,000 under section 80EE of the Income Tax Act of India.

Moreover, several other factors play a crucial role in deciding the rate of interest on a Bajaj Finserv home loan. Borrowers are likely to enjoy the lower limit of the interest rate if they satisfactorily meet eligibility criteria such as –


  • Credit Score – A credit score is one of the most crucial factors to determine a borrower’s home loan interest rate. It is a numerical representation of their creditworthiness.

A borrower with a credit score of 750 or higher is considered as a reliable individual. It shows that they have repaid their previous dues in time and have no history of defaulting. It will ensure they get the latest home loan interest rates from the lender.


  • Location – The location of the property will also play an essential role in determining the interest rate. Properties in urban and metropolitan areas are more likely to attract a higher rate, whereas urban and rural areas will be cheaper and more affordable. 


  • Down Payment – The amount a borrower submits as down payment will reduce the principal sum of the loan. Opting for a large down payment will reduce the EMIs making it easier to repay the loan over the tenor. The lender may even reduce the interest rates marginally if you pay a larger down payment. Note that even a marginal reduction in the interest rates can lead to a substantial reduction in the total loan paid.

A borrower can use an online home loan EMI calculator to find out the amount of down payment and the resultant EMIs.


  • Tenor – Home loans with smaller tenors are likely to have a low rate of interest while longer tenors may attract higher interest rates. Carefully considering the loan tenor according to one’s financial requirements is vital.

Although longer tenors may decrease the rate of interest, the total cost of the loan will increase. Always consider the EMIs along with the total cost of the loan you are liable to pay over the tenor.

Several financial institutions offer flexible tenors to aid borrowers to pay off the debt. Few companies provide flexible tenors ranging up to 240 months according to a borrower’s repayment capacity.

The number of prospective borrowers has increased significantly, thanks to growing income in the middle and lower income groups of the society. The latest home loan interest rates have decreased considerably. If you have pending plans to purchase a residential property, go ahead with a home loan today with proper financial planning.

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