Choosing a lender offering the lowest home loan interest rate can significantly reduce your total repayment burden. In 2026, several public sector banks continue to offer some of the most competitive rates, while private banks and housing finance companies focus on flexible eligibility and faster processing.
Key Highlights:
Lowest Home Loan Rate: 7.10% p.a. onwards (offered by select public sector banks).
Typical Interest Rate Range: 7.10% – 13.00%+ p.a. depending on lender type and borrower profile.
Best Rates For: Borrowers with 750+ credit score, stable salaried income, and lower LTV ratio.
Lowest Home Loan Interest Rates 2026
Here are the top 10 banks offering the lowest home loan interest rates in India in 2026:
Name of the Bank
Interest Rate Per Annum (Starting)
Central Bank of India
7.10% p.a. onwards
Bank of India
7.10% p.a. onwards
Bank of Maharashtra
7.10% p.a. onwards
Indian Overseas Bank
7.10% p.a. onwards
Canara Bank
7.15% p.a. onwards
Indian Bank
7.40% p.a. onwards
UCO Bank
7.35% p.a. onwards
Bank of Baroda
7.20% p.a. onwards
Union Bank of India
7.15% p.a. onwards
Saraswat Bank
7.35% p.a. onwards
Note: 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 2026
The interest rate ranges listed below reflect lender-published slabs. The higher end of the range generally applies to borrowers with low credit scores, non-standard income profiles, higher loan-to-value ratios, or increased credit risk.
Note: Interest rates are subject to change from time to time.
How Home Loan Interest Rates Differ Across Public Sector Banks, Private Banks, and HFCs
Actual home loan interest rates depend on factors such as credit score, loan-to-value (LTV) ratio, employment type, property location, and the lender’s internal risk assessment. Lower headline rates usually apply only to borrowers with strong credit profiles.
Lender Category
Indicative Interest Rate Range (p.a.)
How They Typically Differ
Public Sector Banks
7.10% – 9.90%
Usually offer the lowest starting rates, especially for salaried borrowers with strong credit profiles.
Rate revisions closely follow RBI policy changes. Processing timelines may be longer and eligibility norms stricter.
Private Sector Banks
7.90% – 12.00%+
Known for faster approvals, digital processes, and customised loan products.
Interest rates are generally higher than PSU banks, with wider variation based on credit score, income stability, and loan size.
Housing Finance Companies (HFCs)
8.25% – 13.50%+
Often cater to self-employed, informal income, or higher-risk borrowers.
Interest rates tend to be higher, but eligibility criteria may be more flexible compared to banks.
Types of Home Loan Interest Rates
There are three main types of home loan interest rates in India:
I. Fixed Interest Rate
Remains constant for a specific period (typically 2–10 years).
In 2026, most banks offer fixed-rate options with shorter lock-in periods and reset clauses.
II. Floating Interest Rate
Floating interest rates vary with market conditions.
They are linked to external benchmarks such as the RBI repo rate through lender-specific frameworks like the Repo Linked Lending Rate (RLLR) or External Benchmark Lending Rate (EBLR).
III. 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 Calculate Home Loan Interest?
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:
Credit Score: A score of 750+ improves eligibility and helps secure lower interest rates.
Income & Employment: Stable income and employment with reputed organisations increase chances of better rates.
Type of Loan: Standard home loans have regular rates, while specialised loan products may carry different pricing.
Loan Amount & Down Payment: Higher loan amounts may attract higher rates; a larger down payment can reduce the interest burden.
Interest Rate Type: Fixed rates remain constant, while floating rates change based on repo rate movements.
Women Borrower Concession: Some lenders offer a small interest rate concession (around 0.05%) to women applicants.
Property Location: Properties in prime or well-developed areas may attract better rates.
MCLR/Benchmark Rates: Banks revise lending rates periodically based on MCLR or external benchmark changes.
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
Be sure to check for processing fees or foreclosure charges before opting for a home loan balance transfer.
Note: Processing fees may vary based on the borrower profile, loan amount, and bank-specific policies. Some banks may also offer partial or full fee waivers during promotional or festive periods.
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. To secure the best home loan interest rates, maintain a strong credit profile and explore joint loan options or balance transfers where beneficial.
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 7.10% to 13.20% per annum in India.
What is SBI home loan interest rate?
As of 2026, the SBI home loan interest rate starts from 7.25% 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 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.
About the Author
Mayashree Acharya
Senior Content Writer
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
Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.
Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.
CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.
Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.
Office Address - Defmacro Software Private Limited, C 245A, Ground floor, Room No 1, Vikas Puri, West Delhi, New Delhi, Delhi 110018, India
Cleartax is a product by Defmacro Software Pvt. Ltd.
