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.
Repo Rate (April 2026): 5.25% (unchanged), resulting in stable EMIs for floating-rate borrowers
Lowest Home Loan Interest Rates 2026
Here are the top 10 banks offering the lowest home loan interest rates in India in 2026:
Bank Name
Interest Rate (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
Union Bank of India
7.15% p.a. onwards
Canara Bank
7.15% p.a. onwards
Bank of Baroda
7.20% p.a. onwards
State Bank of India
~7.25% p.a. onwards
UCO Bank
~7.15% – 7.35% p.a. onwards
Indian Bank
~7.40% p.a. onwards
Note: Interest rates vary for each individual depending on the applicant profile, loan amount, and lender policies. Most home loans are linked to repo-based benchmark rates (RLLR/EBLR), which are subject to change. 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. Actual rates vary depending on credit score, loan amount, employment profile, and internal risk assessment.
Note: Interest rates are subject to change from time to time.
Latest RBI Repo Rate & Impact on Home Loan Rates (April 2026)
As per the latest Monetary Policy Committee (MPC) meeting in April 2026, the Reserve Bank of India has kept the repo rate unchanged at 5.25%.
Since most home loans in India are linked to external benchmark rates like EBLR or RLLR, any change in the repo rate directly impacts floating home loan interest rates.
No change in repo rate → Existing EMIs remain largely unchanged
Repo rate increase → EMIs rise for floating-rate borrowers
Repo rate cut → EMIs reduce or loan tenure shortens
PMAY Subsidy on Home Loans (2026)
Under the Pradhan Mantri Awas Yojana (PMAY), eligible borrowers can get interest subsidy on home loans:
Economically Weaker Section (EWS)/Low Income Group (LIG): Up to 6.5% subsidy
Middle Income Group (MIG): Up to 3–4% subsidy
This significantly reduces the effective interest cost.
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.
Home Loan Interest Rates Based on CIBIL Score
Most banks offer their best home loan rates only to borrowers with a credit score of 750 or above.
Credit Score
Interest Rate Impact
750+
Lowest rates (best offers)
700–749
Slightly higher (+0.10%–0.30%)
650–699
Higher rates (+0.50% approx.)
Below 650
Limited approvals or high rates
Home Loan Balance Transfer: Should You Switch?
A home loan balance transfer allows borrowers to shift their existing loan to another lender offering a lower interest rate.
When it makes sense:
Rate difference ≥ 0.50%
Loan tenure remaining is high
Processing cost is low
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.
Which bank has the lowest interest rate for home loan?
Public sector banks such as State Bank of India, Bank of Baroda, and Central Bank of India typically offer the lowest starting home loan interest rates.
Can I get a home loan with zero interest?
No, you cannot get a home loan with zero interest in India, as all lenders charge interest. Government schemes like Pradhan Mantri Awas Yojana (PMAY) offer interest subsidies that can reduce the effective interest cost.
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.
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