Despite the changes and revisions that banks and other private-sector lenders are rolling out for customers ahead of the festive season, many borrowers continue to be tied to their old loans which in turn is tied to the Base Rate or Marginal Cost of fund-based Lending Rates (MCLR). The Newer loans on the other hand are linked to an external benchmark which is RBI’s Repo Rate for most banks.
The external benchmarks serve the purpose of transparency when it comes to benchmark-linked loans. This often leaves lenders with no choice but to cut the repo rate reduction benefits to the customers. However, there is hope. Have a look at some of the housing finance companies and banks that offer customers the lowest interest rates on a home loan.
Kotak Mahindra Bank
Kotak Mahindra Bank is a private sector bank that offers some of the cheapest rates on a home loan. This has been the case since November of 2020. As it stands, the bank offers its customers a home loan interest rate of 6.5 per cent for a Rs 75-lakh loan that has a 20-year tenure. This was for salaried individuals. For those who are self-employed, the bank has given an interest rate of 6.60 per cent onwards. The total range starts at 6.50 per cent and ends at 7.10 per cent depending on the loan for salaried individuals. For the self-employed, this can start at 6.65 per cent and end at 7.25 per cent.
Punjab & Sind Bank
Similar to Kotak Mahindra Bank, the Punjab and Sind Bank offers its customers a home loan interest rate of 6.65 per cent onwards for a tenure of 40 years. The bank also offers a loan-to-value ratio of up to 90 per cent of the property value, with zero processing charges. The processing charges annulment was in place till June 30, 2021.
The State Bank of India
The State Bank of India had recently announced revised interest rates for its home loan offering. The change will be applicable for new as well as balance transfer borrowers. Borrowers who seek out a home loan from this lender can expect to see a loan interest rate of 6.7 per cent going forward. This was rolled out in an attempt to appeal to a larger audience in the festive season with more affordable prices. This is what some might call a first-of-its-kind initiative as the SBI customers will get to avail the home loan at the revised interest rate depending on their credit score.
Tata Capital is apparently giving an interest rate of 6.7 per cent on a home loan for its customers according to information from Bankbazaar and MoneyControl. This interest rate applies to a home loan that clocks in at Rs 75 lakh with a tenure of 20 years. The EMI for the same is estimated to come to Rs 56,805.
Bank of Baroda
The Bank of Baroda is also giving its customers a similar home loan interest rate that comes to 6.75 per cent for a Rs 75-lakh home loan with a tenure of 20 years. This was also rolled out ahead of the festive season as SBI did.
Bajaj Finserv Bank
This public sector lender is offering customers a home loan that comes with an interest rate that starts at a comfortable 6.8 per cent. This indicates that the bank is giving it an EMI of Rs 57,250 This is the same as what the Punjab National Bank is offering in terms of rates. The EMI is the only difference here with Punjab National Bank giving a Rs 57,250 EMI.