Home loan interest rates in India start at 7.25% p.a. in September 2026. The RBI raised the repo rate by 25 basis points to 5.50% on 7 October 2026, its first hike since February 2023. Public sector banks currently offer the lowest rates to borrowers with a credit score of 750 or above.
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Home loans in India remain at their most affordable level in years. Rates start at 7% p.a. from Union Bank of India and Bank of India. The RBI raised the repo rate to 5.50% on 7 October 2026, after 125 basis points of cuts during 2025. Canara Bank, UCO Bank and Indian Bank lend from 7.15%, Central Bank of India and HDFC Bank from 7.20%, and SBI and PNB from 7.25%.
The RBI raised the repo rate by 25 basis points to 5.50% on 7 October 2026, its first hike since February 2023, after a cumulative 125 basis points of cuts during 2025. The Monetary Policy Committee described its stance as calibrated tightening. SBI raised its EBLR from 7.90% to 8.15% effective 15 October 2026.
Public sector banks continue to lead on price. Rates below are the starting rates on Ambak's lender panel as of September 2026 and apply to borrowers with a credit score of 750 or above.
|
Bank / HFC |
Starting Rate (p.a.) |
Rate Range (p.a.) |
Processing Fee |
Key Note |
|
Union Bank Of India |
7.10% |
7.10% - 10.00% |
Rs. 17,700 + GST |
Lowest in our panel; women concession available |
|
Bank Of India |
7.10% |
7.10% - 9.25% |
Rs. 15,000 + GST |
Full repo benefit passed on to borrowers |
|
Canara Bank |
7.15% |
7.15% - 9.25% |
Rs. 15,000 + GST |
Up to 90% financing on eligible properties |
|
Uco Bank |
7.15% |
7.15% - 9.25% |
Rs. 15,000 + GST |
Competitive for salaried applicants |
|
Central Bank Of India |
7.20% |
7.20% - 8.70% |
0.5% + GST |
Percentage-based processing fee |
|
Hdfc Bank |
7.20% |
7.20% - 9.50% |
On request |
Digital process, balance transfer friendly |
|
Bajaj Housing Finance |
7.20% |
7.20% - 9.50% |
Rs.10,000 + GST |
Low flat processing fee |
|
State Bank Of India |
7.25% |
7.25% - 9.50% |
Rs.15,000 + GST |
Concessions for women and government employees |
|
Punjab National Bank |
7.25% |
7.25% - 9.35% |
Waived |
Processing fee waived on current offer |
|
Bank Of Baroda |
7.30% |
7.30% - 9.50% |
Rs.11,800 |
Top-up options on existing loans |
|
Axis Bank |
7.35% |
7.35% - 9.00% |
Rs.10,000 + GST |
Wide branch and digital coverage |
|
Indian Overseas Bank |
7.35% |
7.35% - 10.00% |
Rs. 15,000 + GST |
Full repo benefit passed on |
|
Icici Bank |
7.50% |
7.50% - 9.50% |
5,000 + GST |
Instant in-principle approval |
|
Kotak Bank |
7.70% |
7.70% - 9.70% |
0.30%(below 50 lacs), 10000+gst(above 50 lacs) |
Slab-based processing fee |
Your final rate depends on credit score, loan amount, tenure, employment type and the property itself. Floating-rate loans are linked to the repo rate, so any future RBI move passes through at the next reset.
Different home loan products cater to specific needs - buying a ready flat, building on your own plot, renovating, or moving an existing loan to a cheaper lender.
|
Type of Home Loan |
Purpose |
Key Features |
Typical Tenure |
Max Financing |
|
Home Purchase Loan |
Buy a ready or under-construction property |
Most common product; lowest rates |
Up to 30 years |
80-90% |
|
Home Construction Loan |
Build on a plot you already own |
Disbursed in tranches against construction stages |
Up to 30 years |
75-85% |
|
Plot / Land Purchase Loan |
Buy a residential plot |
Construction usually required within 2-3 years |
Up to 20 years |
70-75% |
|
Home Improvement / Renovation |
Repairs, interiors, extensions |
Smaller ticket size, shorter tenure |
Up to 15 years |
Up to 100% of cost |
|
Home Extension Loan |
Add rooms or floors |
Needs sanctioned building plan approvals |
Up to 20 years |
75-85% |
|
Balance Transfer Loan |
Move an existing loan to a lower rate |
Top-up can be bundled with the transfer |
Existing or extended tenure |
Outstanding + top-up |
|
Top-Up Loan |
Extra funds on a running home loan |
Priced at or near the home loan rate |
Up to 20 years |
Based on repayment record |
|
NRI Home Loan |
For Non-Resident Indians |
Power of attorney accepted for processing |
Up to 30 years |
80-85% |
|
PMAY-U 2.0 Subsidy Loan |
Affordable housing for EWS / LIG / MIG |
4% interest subsidy on the first ₹8 lakh |
Up to 20 years |
Up to 90% |
If you already have a home loan, compare a balance transfer against a rate reset with your current lender before switching - the cheaper option is often the one you already hold.
Eligibility is assessed on age, income stability, credit score and the property being financed.
|
Criteria |
Salaried Applicants |
Self-Employed Applicants |
General Requirements |
|
Age |
21-60/65 years |
21-70 years |
Up to 70 at loan maturity |
|
Minimum Income |
₹25,000-₹50,000 per month |
₹5-10 lakh a year (ITR proof) |
Stable, documented source |
|
Credit Score |
750+ for the best rates |
750+ preferred |
700 is the usual floor |
|
Work / Business Vintage |
1-2 years of stable employment |
3-5 years of business continuity |
Co-applicant improves eligibility |
|
Debt-to-Income Ratio |
Max 50-60% (FOIR) |
Max 60% |
Existing EMIs are counted |
|
Property |
Clear, marketable title |
Clear, marketable title |
LTV up to 90% for loans under ₹30 lakh |
Adding a woman as co-applicant or co-owner typically earns a 0.05%-0.10% rate concession. NRIs are eligible, with repatriation of proceeds permitted subject to FEMA rules.
Keep scanned copies ready before you apply - incomplete documentation is the most common cause of delay between sanction and disbursement.
|
Category |
Salaried Applicants |
Self-Employed Applicants |
Common Documents |
|
Identity & Address Proof |
Aadhaar, PAN, Passport, Voter ID |
Aadhaar, PAN, Passport |
Passport-size photographs |
|
Income Proof |
Last 3 months' salary slips, Form 16 |
Last 3 years' ITRs with P&L and Balance Sheet |
Bank statements (6-12 months) |
|
Employment / Business Proof |
Appointment letter, 2 years' stability |
Business registration, 3-5 years' vintage |
Employer or GST details |
|
Property Documents |
Sale agreement, title deed, NOC |
Same |
Approved plan, encumbrance certificate |
|
For Balance Transfer |
Existing loan statement, foreclosure letter |
Same |
List of documents held by current lender |
The application process is now largely digital, with instant in-principle approvals available online from most lenders.
|
Step |
What Happens |
Time Taken |
Tip |
|
1. Check eligibility & get pre-approval |
Use an online calculator, then submit basic details for an in-principle sanction |
Minutes to a few hours |
A credit score of 750+ improves both approval odds and pricing |
|
2. Submit the formal application |
Complete the form online or in branch with KYC |
1-2 days |
Compare at least three lenders before committing |
|
3. Document verification |
Upload documents; lender runs credit and income checks |
3-7 days |
Keep scanned copies ready in advance |
|
4. Property valuation & legal check |
Lender appoints a valuer and a lawyer |
7-15 days |
Confirm clear title and an encumbrance certificate |
|
5. Sanction letter |
Final approval with rate, tenure and conditions |
After verification |
Negotiate the rate and processing fee at this stage |
|
6. Agreement & disbursement |
Sign the agreement; funds are released |
2-5 days |
Under-construction property is disbursed in tranches |
At the current starting rate of 7.10% p.a., a ₹50 lakh loan over 20 years costs roughly ₹39,066 a month. The examples below show how EMI, total interest and total repayment change with rate, amount and tenure.
|
Loan Amount |
Interest Rate |
Tenure |
Monthly EMI |
Total Interest Payable |
Total Repayment |
|
₹50 Lakh |
7.10% |
20 years |
₹39,066 |
₹43.76 Lakh |
₹93.76 Lakh |
|
₹50 Lakh |
7.25% |
20 years |
₹39,519 |
₹44.85 Lakh |
₹94.85 Lakh |
|
₹50 Lakh |
7.50% |
20 years |
₹40,280 |
₹46.67 Lakh |
₹96.67 Lakh |
|
₹50 Lakh |
7.90% |
20 years |
₹41,511 |
₹49.63 Lakh |
₹99.63 Lakh |
|
₹75 Lakh |
7.25% |
25 years |
₹54,211 |
₹87.63 Lakh |
₹1.63 Crore |
|
₹1 Crore |
7.50% |
30 years |
₹69,921 |
₹1.52 Crore |
₹2.52 Crore |
A longer tenure lowers the monthly EMI but raises total interest substantially. Use an EMI calculator with your own figures before finalising the tenure.
Home loan deductions are available under the old tax regime. Under the new regime, interest on a self-occupied property cannot be claimed; interest on a let-out property remains deductible.
|
Provision |
Deduction On |
Limit per Financial Year |
Conditions |
|
Section 80C |
Principal repayment, plus stamp duty and registration |
Up to ₹1.5 lakh |
Property must not be sold within 5 years of possession |
|
Section 24(b) |
Interest on a self-occupied property |
Up to ₹2 lakh |
No cap on a let-out property, subject to loss set-off limits |
|
Joint Loan |
Each co-borrower claims separately |
Limits apply per co-borrower |
All claimants must be co-owners and co-borrowers |
|
Section 80EE / 80EEA |
Additional interest for first-time buyers |
₹50,000 or ₹1.5 lakh |
Subject to sanction-date and property-value conditions |
The Income Tax Act, 2025 replaces the 1961 Act with effect from 1 April 2026 and applies from Assessment Year 2027-28. It renumbers and reorganises the sections but does not change these deduction limits.
A balance transfer moves your outstanding home loan to a new lender at a lower rate, often with additional top-up funds. With rates starting at 7.10%, borrowers still paying 8.5% or more have the most to gain.
|
Benefit |
Details |
Illustration (₹50 lakh outstanding, 15 years left) |
|
Lower interest rate |
Switch from 8.50%+ down to 7.10%-7.50% |
₹4-6 lakh saved in total interest |
|
Lower EMI or shorter tenure |
Keep the EMI unchanged to close the loan sooner |
EMI falls by ₹2,000-4,000 a month |
|
Top-up funds |
Additional borrowing at or near the home loan rate |
Cheaper than a personal loan at 10%+ |
|
No prepayment charges |
Applies to floating-rate loans sanctioned or renewed on or after 1 January 2026 |
Full flexibility to prepay or close early |
|
Women co-applicant concession |
0.05%-0.10% lower rate at most lenders |
Further ₹50,000-1 lakh saved over the tenure |
Top-up loans are priced close to the home loan rate, which makes them materially cheaper than personal loans for renovation or other large expenses.
|
Lender |
Top-Up Rate (p.a.) |
Max Amount |
Key Feature |
|
Union Bank of India |
From 7.10% |
Up to 100% of the original loan |
Overdraft facility available |
|
Bank of India |
From 7.10% |
Based on property value |
Flat processing fee |
|
State Bank of India |
From 7.25% |
Up to ₹1 crore |
No fresh documents for a clean track record |
|
HDFC Bank |
From 7.20% |
Up to ₹50 lakh |
Digital approval |
|
Bajaj Housing Finance |
From 7.20% |
High LTV |
Flexible end use, long tenure |
Weigh the switching cost - processing fee, legal and valuation charges - against the interest saved. A transfer usually pays for itself only if the rate gap is at least 0.50% and you have more than five years left.
Pradhan Mantri Awas Yojana - Urban 2.0 launched on 1 September 2024 and runs for five years, to 2029. Its Interest Subsidy Scheme replaces the older CLSS slabs with a single, simpler benefit.
|
Parameter |
PMAY-U 2.0 Interest Subsidy Scheme |
|
Subsidy rate |
4% on the first ₹8 lakh of the loan |
|
Maximum benefit |
₹1.80 lakh, released in instalments over 5 years |
|
Eligible income |
EWS up to ₹3 lakh; LIG ₹3-6 lakh; MIG ₹6-9 lakh a year |
|
Maximum loan for subsidy |
₹25 lakh |
|
Maximum property value |
₹35 lakh |
|
Maximum carpet area |
120 square metres |
|
Other conditions |
The family must not own a pucca house anywhere in India; women co-ownership is encouraged |
Apply through your lender at the time of sanction - the subsidy is credited to the loan account and reduces either the outstanding principal or the EMI.
NRIs borrow on broadly the same terms as resident borrowers. Processing is handled through a power of attorney held by a representative in India.
|
Lender |
Starting Rate (p.a.) |
Max Tenure |
Key Eligibility |
|
Bank of India |
7.10% |
25 years |
Minimum age 21, stable overseas income |
|
State Bank of India |
7.25% |
30 years |
Income proof and power of attorney |
|
HDFC Bank |
7.20% |
30 years |
Proof of overseas employment |
|
Axis Bank |
7.35% |
30 years |
Resident co-applicant preferred |
|
ICICI Bank |
7.50% |
30 years |
Repatriation of sale proceeds permitted |
Financing is typically capped at 80-85% of property value for NRIs, and repayment must be made through NRE, NRO or FCNR accounts.
The gap between the best and worst rate a lender will offer the same property is driven mostly by your profile. These levers make the largest difference.
|
Action |
Benefit |
Best For |
|
Maintain a credit score of 750+ |
0.25%-0.50% lower rate, and better negotiating room |
Every applicant |
|
Add a woman as co-applicant or co-owner |
0.05%-0.10% concession at most lenders |
Families with an eligible woman member |
|
Choose a repo-linked floating rate |
Future RBI cuts pass through at the next reset |
Long-tenure borrowers |
|
Strengthen income documentation |
Higher sanction amount and better pricing |
Self-employed applicants with clean ITRs |
|
Transfer an existing high-rate loan |
Move from 8.50%+ down to 7.10%-7.50% |
Loans more than a year old |
|
Prepay partially when you can |
Cuts principal and total interest sharply |
Floating-rate loans sanctioned from January 2026 |
|
Apply during a fee waiver window |
Saves ₹10,000-25,000 in processing charges |
New applicants who can time the application |
For a ₹50 lakh loan over 20 years, the difference between 7.10% and 8.00% is about ₹2,756 a month and roughly ₹6 lakh in total interest.
Most rejections and overpriced sanctions trace back to a short list of avoidable errors.
|
Mistake |
Why It Is Costly |
How to Avoid It |
|
Not checking your credit score first |
A score below 750 means a higher rate, or outright rejection |
Check your CIBIL report and clear any errors before applying |
|
Applying to several lenders at once |
Multiple hard enquiries pull the score down |
Get an in-principle approval first, then formally apply |
|
Looking only at the headline rate |
Processing, legal and valuation charges add up |
Compare total cost of borrowing, not the rate alone |
|
Choosing the wrong tenure |
Too short strains cash flow; too long inflates interest |
Pick the shortest tenure whose EMI you can service comfortably |
|
Overborrowing |
A high LTV raises both the rate and the rejection risk |
Borrow only what the purchase actually needs |
|
Confusing fixed and floating |
Fixed is priced higher; floating tracks the repo rate |
Choose floating unless you specifically want rate certainty |
|
Skipping property due diligence |
Title defects stall disbursement after sanction |
Obtain the encumbrance certificate and approved plan upfront |
The policy backdrop has been stable through 2026. These are the developments that currently affect home loan borrowers.
|
Update |
Details |
What It Means for Borrowers |
|
Repo rate raised to 5.50% |
25 bps hike on 7 October 2026, the first since February 2023; stance: calibrated tightening |
Repo-linked floating rates reset upward; SBI EBLR rose from 7.90% to 8.15% from 15 October 2026 |
|
125 bps of cuts fully passed through |
Cuts made during 2025 are now reflected in repo-linked lending rates |
Starting rates of 7.10%-7.35% at leading public sector banks |
|
No prepayment or foreclosure charges |
RBI (Pre-payment Charges on Loans) Directions apply to floating-rate loans sanctioned or renewed on or after 1 January 2026 |
Prepay or transfer without penalty on qualifying loans |
|
PMAY-U 2.0 running to 2029 |
4% subsidy on the first ₹8 lakh, capped at ₹1.80 lakh |
A live option for EWS, LIG and MIG first-time buyers |
|
Balance transfer activity elevated |
Wide gap between legacy and current rates |
Worth reviewing any loan still priced above 8.50% |
If you already hold a floating-rate loan, ask your lender for a rate reset before considering a transfer - it is usually faster and cheaper than switching.
Run the numbers before you apply. These tools cover the decisions that matter most.
|
Tool |
What It Does |
Best For |
|
EMI Calculator |
Converts loan amount, rate and tenure into EMI and total interest |
Budgeting and tenure selection |
|
Eligibility Calculator |
Estimates the sanction amount from income, age and obligations |
Checking feasibility before applying |
|
Balance Transfer Calculator |
Compares interest saved against switching costs |
Existing borrowers above 8.50% |
|
Tax Benefit Calculator |
Estimates Section 80C and 24(b) deductions |
Annual tax planning under the old regime |
|
Prepayment Calculator |
Shows interest saved and tenure cut from a lump sum |
Borrowers with surplus funds |
As a benchmark: a ₹50 lakh loan at 7.10% over 20 years works out to an EMI of about ₹39,066 and total interest of roughly ₹43 lakh.
Common questions from borrowers applying in the current rate environment.
|
Question |
Answer |
|
What is the current RBI repo rate? |
5.50%. The RBI raised it by 25 basis points on 7 October 2026, after 125 basis points of cuts during 2025. |
|
What is the lowest home loan rate right now? |
7.10% p.a., from Union Bank of India and Bank of India on our lender panel, for borrowers with a credit score of 750 or above. |
|
Are there prepayment or foreclosure charges? |
No, on floating-rate loans to individuals sanctioned or renewed on or after 1 January 2026. Older loans continue under their existing terms. |
|
Do women borrowers get a lower rate? |
Most lenders offer a 0.05%-0.10% concession where a woman is a co-applicant or co-owner. |
|
Can an existing borrower benefit from lower rates? |
Yes - through a rate reset with the current lender, a reduction in EMI or tenure, or a balance transfer. |
|
What subsidy is available to first-time buyers? |
PMAY-U 2.0 offers a 4% interest subsidy on the first ₹8 lakh, capped at ₹1.80 lakh, for eligible EWS, LIG and MIG families. |
|
How much can I borrow? |
Typically 80-90% of property value, subject to income, credit score and existing obligations. |
|
What credit score do I need? |
700 is the usual minimum; 750 and above secures the best pricing. |
Rates and offers vary by borrower profile and change without notice. Check current terms with the lender before applying.
