Lowest Home Loan Interest Rates In August 2025

By Mayashree Acharya

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Updated on: Aug 19th, 2025

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8 min read

When applying for a home loan, ensure to choose the lender offering for the lowest home loan interest rate in India. In 2025, several banks are offering competitive home loan interest rates ranging from 7.35% p.a. onwards, based on your credit score, loan amount, and profile. 

This comprehensive guide provides the lowest home loan interest rates and their comparison to help you make an informed decision.

Lowest Home Loan Interest Rates 2025 

Here are the top 10 banks offering cheapest home loan interest rates in India in 2025:

Name of the BankInterest Rate Per Annum (As of August 2025)*

Central Bank of India

7.35% onwards

Bank of India

7.35% onwards

Bank of Maharashtra

7.35% onwards

Indian Overseas Bank

7.35% onwards

Canara Bank

7.40% onwards

Indian Bank

7.40% onwards

UCO Bank

7.40% onwards

Bank of Baroda

7.45% onwards

Union Bank of India

7.45% onwards

Saraswat Bank

7.50% onwards

*Interest rates vary for each individual depending on the applicant profile, loan amount, and lender policies. Thus, check with the bank officials for the exact interest rate. 

Lowest Home Loan Interest Rates of Different Banks 2025

Name of the Bank

Interest Rate*

Processing Fee

Bank of Baroda

7.45% to 10.20% p.a. 

Minimum ₹8,500 and maximum ₹25,000

ICICI Bank

8.75% to 11.80% p.a.

Up to 2% of the loan amount

HDFC Bank

7.90% to 13.20% p.a.

Up to 0.50% of the loan amount or ₹3,300 (whichever is higher)

Axis Bank

8.35% to 11.90% p.a.

Up to 1.00% of the loan amount or ₹10,000 (whichever is higher)

Punjab National Bank

8.50% to 10.85% p.a.

0.35% of the loan amount (minimum ₹2,500 and maximum ₹15,000) 

State Bank of India

7.50% p.a. to 10.75% p.a.

0.35% of the loan amount (minimum ₹2,000 and maximum ₹10,000)

Kotak Mahindra Bank

7.99% p.a. onwards

2% of the loan amount

Union Bank of India

7.45% p.a. to 10.00% p.a.

0.50% of the loan amount (maximum ₹15,000)

Central Bank of India

7.35% p.a. to 9.40% p.a.

0.50% of the loan amount (maximum ₹20,000)

Bank of India

7.35% p.a. to 12.15% p.a.

0.35% of the loan amount (Minimum ₹3,500 and maximum ₹30,000)

Yes Bank

9.00% p.a. to 11.50% p.a.

1.5% of the loan amount or ₹10,000 (whichever is higher) 

IDBI Bank

7.55% p.a. to 11.75% p.a.

0.50% of the loan amount

HSBC Bank

7.70% p.a to 12.75%

1% of the loan amount or ₹10,000 (whichever is higher)

IDFC First Bank

8.85% p.a. onwards

Up to 3% of the loan amount

Punjab & Sind Bank

7.55% p.a. to 10.75% p.a.

0.15% to 0.25% of the loan amount (minimum ₹1,000 and maximum ₹15,000)

Canara Bank

7.40% p.a. to 10.25% p.a.

0.50% of the loan amount (minimum ₹1,500 and maximum ₹10,000) 

Indian Bank

7.40% p.a. to 9.40% p.a.

Minimum ₹1,500 and maximum ₹15,000 (Depends on the loan amount and variant)

IndusInd Bank

8.10% p.a. to 9.60% p.a.

Up to 1.50% of the loan amount 

UCO Bank

7.40% p.a. to 9.50% p.a.

0.50% of the loan amount (minimum ₹1,500 and maximum ₹15,000)

Indian Overseas Bank

7.35% p.a. to 8.45% p.a.

Get in touch with the bank branch

Bank of Maharashtra

7.35% p.a. to 9.90% p.a.

0.25% of the loan amount

Bandhan Bank

8.41% p.a. to 12.58% p.a.

Up to 1% of the loan amount

Karur Vysya Bank

7.95% p.a. to 10.90% p.a.

Minimum ₹2,500 to maximum ₹7,500

Saraswat Bank

7.50% p.a. to 8.90% p.a.

Minimum ₹2,500 to maximum ₹7,500

Jammu and Kashmir Bank

8.75% p.a. to 9.85% p.a.

0.25% of the loan amount (Minimum ₹2,000 to maximum ₹50,000)

South Indian Bank

8.30% p.a. to 10.60% p.a.

0.50% of the loan amount (Minimum ₹10,000)

Federal Bank

8.75% p.a. onwards

0.50% of the loan amount (Minimum ₹3,000 to maximum ₹7,500)

Karnataka Bank

8.19% p.a. to 11.73% p.a.

Get in touch with the bank branch

Dhanlaxmi Bank

8.60% p.a. to 9.25% p.a.

1.00% of the loan amount (Maximum ₹10,000)

Tamilnad Mercantile Bank 

8.15% p.a. to 9.50% p.a.

0.50% of the loan amount

*Interest rates are subject to change from time to time. The above interest rates are as of 19 August 2025.

Types of Home Loan Interest Rates

There are three main types of home loan interest rates in India:

Fixed Interest Rate

  • Remains constant for a specific period (typically 2–10 years). 
  • In 2025, most banks offer fixed-rate options with shorter lock-in periods and reset clauses.

Floating Interest Rate

  • Varies with market trends and is linked to the RBI’s Repo Rate through RLLR (Repo Linked Lending Rate). 
  • If RBI lowers the repo rate, your interest rate may reduce.

Hybrid Interest Rate

  • Begins with a fixed rate (usually for 2–5 years) and then transitions to a floating rate. 
  • Ideal if you plan to prepay early and want initial EMI stability.

How to Apply For a Home Loan?

Here is a step-by-step guide to applying for a home loan:

Step 1: Visit the bank where you want to avail a home loan and obtain the home loan application form. 

Step 2: Obtain the home loan application form and fill in the following details on the application form:

  • Your personal information, such as your name, contact details, current residential address, etc.
  • Educational qualifications
  • Your monthly income
  • Employment history (current and previous)
  • Details of the property you wish to purchase
  • Estimated property cost
  • Method to finance the home

Step 3: Once you submit the home loan application with the required documents, the bank will process your request. They will review your credit score and, depending on your credit history, assess your eligibility. 

Step 4: Before disbursing the loan, the bank will conduct legal and technical evaluations of the property.

Step 5: After the verification of application and submitted documents, the bank will sanction the loan. The process can last up to two days. An in-person meeting may be required so the bank can assess your financial capabilities before approving the loan.

Step 6: After completing all verifications, you must pay the home loan processing fee. 

Step 7: Once you meet the bank's requirements, they will issue a formal agreement letter. After signing the agreement, your loan amount will be credited to your bank account. You will also receive an email with a detailed EMI schedule outlining your repayment plan.

How to Calculate Home Loan Interest?

Home loans are essentially extended over a longer period of time, which requires a clear understanding of the total interest liability from the outset. To find out, use one of the following methods:

Manual EMI Calculation Formula

To estimate how much interest you’ll pay, you can use the following formula: 
EMI = [P × r × (1 + r)^n] ÷ [(1 + r)^n – 1]
Where:

P = Principal amount
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Loan tenure in months

For example: 

  • If, P = ₹40 lakh 
  • r = 8.25% 
  • n = for 20 years
  • Total Interest = ₹41,79,830
  • EMI payable = ₹34,083

EMI Calculator

Prospective borrowers can use ClearTax Home Loan EMI Calculator by entering basic details like home loan amount, loan repayment period and interest rate. After entering these details, click ‘Calculate’ to get a comprehensive breakdown defining the amount to be paid as interest and principal.

Factors Affecting Home Loan Interest Rates

Here are some factors that significantly impact your home loan interest rates. Hence, you need to check them out before applying for a loan: 

  • Credit Score: A credit score of 750 and above from CIBIL and other bureaus increases home loan favourability. Lenders and financial institutions use credit scores to determine home loan interest rates, often offering lower rates to those with higher scores.
  • Income and Employment: Lenders assess home loan eligibility by considering income, type of employment and employer profile. Individuals employed by the government, PSUs or reputed private sector organisations are preferred while irregular or insufficient income can result in higher interest rates.
  • Type of Housing Loan: Different types of home loans attract different interest rates. Regular home loans have standard rates, while any special type of loans may have higher interest rates.
  • Loan Amount: The required amount of the loan affects the interest rates of the housing loan. Loans up to Rs.30 lakh usually have lower rates, and making a substantial down payment can further reduce the interest burden, resulting in a lower interest rate.
  • Interest Rate Type: The chosen type of interest rate (fixed or floating) affects repayment. Fixed-rate loans maintain a constant EMI throughout, while floating-rate loan EMI fluctuates depending on factors such as the repo rate. 
  • Concession on Interest Rate for Women: Some lenders offer female borrowers a 0.05% interest rate relief. Couples can improve eligibility and enjoy tax benefits by opting for a joint home loan with the spouse as the primary applicant.
  • Property Location: The location of your property greatly affects the interest rate on your home loan. Homes in desirable neighbourhoods with sufficient amenities tend to attract lower interest rates, while properties in less desirable areas can command higher rates. 
  • MCLR Rates: MCLR rates, or marginal cost of funds lending rates, are the minimum interest rates banks can offer a loan at. These rates are not fixed and may change. Banks usually conduct an annual review on a designated reset date to assess the current home loan interest rate and adjust as needed.

How to Get the Lowest Interest Rate on Home Loan?

Interest rates on home loans depend on a lot of factors. Hence, you can follow these given tips to get the lowest home loan interest rate in India: 

  • Maintain a credit score of 750 or higher
  • Compare real-time rates using fintech marketplaces or aggregator portals
  • Opt for a joint home loan with a female co-applicant to get concessions
  • Make a higher down payment to reduce LTV ratio
  • Consider a home loan balance transfer if your current rate is higher
  • Check eligibility for special schemes offered to salaried professionals or first-time buyers

Note: Be sure to check for processing fees or foreclosure charges before opting for a home loan balance transfer.

Finding the lowest home loan interest rate in India requires careful comparison of offers from various banks. Factors like credit score, income, and property location can impact the final rate offered. If you’re wondering which bank has the lowest interest rate on home loan, public sector banks like Union Bank and Bank of Maharashtra currently lead the chart in 2025. To secure the best home loan interest rates, maintain a strong credit profile and explore joint loan options or balance transfers where beneficial.

Banks Offering Home Loan and there Interest rates:
Yes Bank Home Loan Interest Rate
Punjab Bank Home Loan Interest Rate
ICICI Bank Home Loan Interest Rate
HDFC Bank Home Loan Interest Rate
Union Bank of India Home Loan Interest Rate
Central Bank of India Home Loan Interest Rate

Frequently Asked Questions

What is the home loan interest rate?

The home loan interest rate is the percentage a lender charges on the principal loan amount for purchasing or constructing a house. It can be fixed, floating, or hybrid and typically ranges between 7.35% to 13.20% per annum in India.

Which bank has the lowest interest rate for home loan?

As of August 2025, Bank of Maharashtra, Central Bank of India, Bank of India and Indian Overseas Bank offers the lowest home loan interest rate starting at 7.35% per annum. However, the final rate depends on factors like your credit score, loan amount, and employment profile.

What is SBI home loan interest rate?

As of August 2025, the SBI home loan interest rate starts from 7.50% per annum. The final rate may vary based on your credit score, loan amount, type of employment, and loan scheme. Always check SBI’s official website for the latest rates and offers.

What is the EMI for a 10 lakh home loan?

The EMI for a ₹10 lakh home loan depends on the interest rate and loan tenure. For example, at 8.25% interest for 20 years, the EMI would be approximately ₹8,520 per month. At the same rate for 15 years, the EMI would be around ₹9,679 per month. 

What will be the EMI for 15 lakhs?

The EMI for a ₹15 lakh home loan will vary based on the interest rate and loan tenure. For example, at an 8.25% annual interest rate, the EMI would be approximately ₹12,780 for 20 years and ₹14,519 for 15 years.

What is the interest on a 20 lakh home loan?

The interest on a ₹20 lakh home loan depends on the interest rate and loan tenure. For instance, at 8.25% p.a. interest for 20 years, the total interest payable would be approximately ₹19.7 lakh, making the total repayment around ₹39.7 lakh.

Is the home loan rate less for women?

Yes, many banks in India offer concessional home loan interest rates to women, usually 0.05% lower than standard rates. This benefit applies if the woman is the primary or co-applicant in the loan.

Which bank is better for a home loan, private or government?

Government banks usually offer lower home loan interest rates, while private banks provide faster processing and flexible services. You must choose based on your priorities.

Will home loan interest rates go down in 2025 in India?

In 2025, home loan interest rates in India are expected to remain steady or slightly decrease, depending on the RBI’s monetary policy and inflation trends. Borrowers should watch for repo rate changes to anticipate future shifts.

About the Author
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Mayashree Acharya

Senior Content Writer
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I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more

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