15 Top Banks And HFCs Offering Cheapest Home Loan Of Rs. 75 Lakh And Above

Amid record low interest rate that are to continue for some more time until the economic recovery picks pace, there is reported an increase in demand for home loan. Also, the current pandemic time has nudged most of us to work from home which is another reason propelling demand for home loan higher.

In fact Housing Development Finance Corporation's VC and CEO Keki Mistry in an interview with a leading business channel mentions that the structural demand for housing in India will always be strong for a variety of factors - one is affordability, the other is the fact that we have a young population.

Importantly, as a thumb rule it is suggested that when zeroing in on the residential property you should ensure that its price is not more than five times your annual income, this is if you are taking a home loan to buy the same.

Pointers to note when applying for home loan in India:

1. 35/50 rule: Generally speaking banks do not disburse a loan amount on which you would need to pay an EMI of over 45-50% of your monthly salary. Nonetheless what best you can adhere to is by the 35/50 rule which suggests you to go for a loan amount on which you will have to pay maximum home loan EMI up to 35% of your monthly take home pay while total EMI including personal loan, car etc. should be limited to 50%. For boosting the eligibility of your home loan amount, you can include your spouse's income also.

2. Opt for a shorter duration loan: If your pocket allows it shall always be wise to go for a shorter duration loan as then the interest cost will come down substantially. So, while the EMI per lakh for a longer duration is less, the interest cost is actually on the higher side when compared to the shorter duration loan.

3. Credit score will determine a better deal for you: Borrowers with a good credit profile and high credit score will be able to avail home loan at a competitive rate of interest in comparison to other borrowers. Generally a credit score above 750 is deemed a good score. Also, if you happen to have banking relationship with the lender do negotiate for a better rate. Moreover, for greater transparency, try and extract maximum possible on what would the home loan costs include such as processing charges etc. Now if you too are willing to capitalize on the current low interest rate regime and have shortlisted a residential property, here are the banks and HFCs in India offering lowest interest rate on high ticket size loan of Rs. 75 lakh and above. The interest rate on home loan valued above Rs. 75 lakh varies between 6.65% to 7.1 percent.

 

 

Banks and HFCs Floating Home loan interest rate on loan amount of Rs. 75 lakh and above

 

Bank or HFC	Floating Home loan interest rate on loan amount over Rs. 75 lakh
Kotak Mahindra Bank	6.65%
Punjab and Sind Bank	6.65%
Bank of Baroda	6.75%
PNB	6.8%
Central Bank	6.85%
Union Bank of India	6.90%
LIC Housing Finance	6.9%
UCO Bank	6.9%
Tata Capital	6.9%
Union Bank of India	6.9%
Bank of Maharashtra	6.9%
Axis Bank	6.9%
Bajaj Finserv	6.95%
HDFC	7.1%

 Lenders including State Bank of India (SBI) and HDFC are offering home loans of more than Rs 75 lakh with a tenure of 20 years at interest rates of 6.95-7.1 percent.

Note the details have been fetched from individual bank site as on May 11, 2021. 

 

Tax benefit on home loan:

1. Deduction on repayment of principal amount of home loan: The principal amount repaid can be claimed as a deduction under section 80C of the Income-tax Act, 1961 for self-occupied property. Also note, section 80C advantage can also be claimed in respect of the stamp duty and registration charges paid while buying a house property.

2. Deduction on interest paid on a home loan: An individual can also claim deduction on the interest paid on the home loan. Deduction on the interest paid on a home loan is available under section 24 for maximum up to Rs 2 lakh in a given financial year in case of self-occupied property.

Note: There are other additional deductions too available for taxpayers availing a smaller ticket size loan such as those available under 80EE and 80EEA but they are not being mentioned here as the article covers primarily home loan of Rs. 75 lakh and above.