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.
Here are the top 10 banks offering cheapest home loan interest rates in India in 2025:
Name of the Bank | Interest 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.
Name of the Bank | Interest Rate* | Processing Fee |
7.45% to 10.20% p.a. | Minimum ₹8,500 and maximum ₹25,000 | |
8.75% to 11.80% p.a. | Up to 2% of the loan amount | |
7.90% to 13.20% p.a. | Up to 0.50% of the loan amount or ₹3,300 (whichever is higher) | |
8.35% to 11.90% p.a. | Up to 1.00% of the loan amount or ₹10,000 (whichever is higher) | |
8.50% to 10.85% p.a. | 0.35% of the loan amount (minimum ₹2,500 and maximum ₹15,000) | |
7.50% p.a. to 10.75% p.a. | 0.35% of the loan amount (minimum ₹2,000 and maximum ₹10,000) | |
7.99% p.a. onwards | 2% of the loan amount | |
7.45% p.a. to 10.00% p.a. | 0.50% of the loan amount (maximum ₹15,000) | |
7.35% p.a. to 9.40% p.a. | 0.50% of the loan amount (maximum ₹20,000) | |
7.35% p.a. to 12.15% p.a. | 0.35% of the loan amount (Minimum ₹3,500 and maximum ₹30,000) | |
9.00% p.a. to 11.50% p.a. | 1.5% of the loan amount or ₹10,000 (whichever is higher) | |
7.55% p.a. to 11.75% p.a. | 0.50% of the loan amount | |
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.
There are three main types of home loan interest rates in India:
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:
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.
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:
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:
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.
Here are some factors that significantly impact your home loan interest rates. Hence, you need to check them out before applying for a 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:
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