This festive season, payable interest rates and processing fee discounts are pouring at the home loan window, taking the rates to a 15-year-low. This is the correct time to conduct your plan, if you are trying to buy a new house or transfer your unpaid debt to another lender. Furthermore, another motivating metric is the stability guaranteed by the external benchmark-linked loan regime. Kotak Mahindra Bank has once again lifted the table, dropping its interest rate to 6.75%. And looking at the home loan interest rates public sector banks have won the top positions throughout clusters in the 'cheapest loans' and they tend to conquer the list. With interest rates beginning at 6.8 per cent, Union Bank of India is at the second position in the list after Kotak Mahindra Bank. The home loan rates of the Bank of Baroda (BoB), Bank of India (BoI) and Central Bank of India start at 6.85 per cent respectively. Currently, interest rates are below 7 per cent of all the top lenders respectively.
|Banks||ROI in %|
|Kotak Mahindra Bank||6.75|
|Union Bank of India||6.80|
|Bank of Baroda||6.85|
|Bank of India||6.85|
|Central Bank of India||6.85|
|Punjab & Sind Bank||6.90|
|LIC Housing Finance||6.90|
Note: The interest rates mentioned on the above table is only applicable for a loan amount of Rs.30 lakh with a period of 20 years and eligible borrowers respectively.
The State Bank of India (SBI) is India's largest bank and provides interest rates commencing at 6.9 per cent. An interest rate waiver of 25 basis points for loans above Rs 75 lakh has also been declared. As is the trend with ICICI Bank and LIC Housing Finance, the country's largest mortgage lender, HDFC, also offers 6.9 per cent interest on its home loans. Although interest rates for home loans are at highly favourable rates, based on your credit score, loan size and even profession, you may have to pay higher rates. For instance, relative to their employed peers, SBI's non-salaried borrowers will charge 15 bps more. Likewise, a waiver of 15-20 bps on home loan interest rates will be offered to BOI's borrowers with credit scores of 760 or more respectively.
It is better to ask your bank about how the credit risk aspect will be managed, which will alter if your credit assessment changes substantially, thereby influencing your interest rate. Your preferred option is a bank which blatantly evaluates how credit risk will be measured over the term of the loan.