The Reserve Bank of India (RBI) raised the repo by 50 bps to 5.40 per cent in its monetary policy meeting last month. The central bank has increased the repo rate by 1.40 per cent in the last two months. Floating rate home loan borrowers already servicing a loan will see additional financial burden as rate hikes would result in longer repayment tenure while monthly EMIs remain the same. New home loan borrowers will be impacted as banks have increased their lending rates. Exisiting home loan borrowers can consider refinancing their loan, pre-paying periodically or voluntarily increasing their EMIs to reduce the financial burden of an increased loan rate. If you are in the market shopping for a home loan, it would be wise to assess your credit score beforehand. A borrower with a credit score over 750, stable income, and loan repayments on time may get a home loan offers at a premium of around 250-275 basis points over the repo rate, which is now 5.40. Additionally, it is important to compare different interest rates lenders offer to grab the best deal.
If you are plan to take a home loan, here is a list of 10 banks offering the lowest home loan interest rates.
| Bank Name | Interest Rate Range For Home Loans Under Rs. 30 Lakh (% p.a.) |
| Central Bank | 7.20-7.65 |
| Bank of India | 7.80-9.65 |
| Bank of Maharashtra | 7.80-9.70 |
| UCO Bank | 7.90-8.10 |
| Indian Bank | 7.90-8.40 |
| Punjab & Sind Bank | 7.90-9.0 |
| Union Bank of India | 7.90-9.40 |
| State Bank of India | 8.05 – 8.65 |
| IDBI Bank | 8.0-11.15 |
| Canara Bank | 8.05-10.30 |
Disclaimer: Interest rates that vary with tenures or credit scores within the specified loan amount are indicated as a range. Data taken from respective bank’s websites on Sep 2, 2022.
