Top 7 Banks Offering the Lowest Home Loan Interest Rates in India 2025
Home loan interest rates directly affect your EMI burden and long-term financial planning. Choosing the right bank could save you lakhs over your loan tenure. In this guide, we break down the lowest home loan interest rates offered by top Indian banks in 2025, along with their eligibility, charges, and special offers.
What Is the Current Home Loan Interest Rate Trend in India?
As of July 2025, home loan interest rates in India typically range between 8.25% and 9.50% per annum. These rates depend on multiple factors including:
- RBI’s repo rate (currently at 6.50%)
- Type of interest (floating vs. fixed)
- Applicant’s credit score and income
- Bank-specific policies
Floating rates are more popular as they reflect market changes, while fixed rates offer predictability.
1. State Bank of India (SBI)
- Interest Rate: 8.30% – 9.15% (floating)
- Processing Fee: 0.35% of loan amount (min ₹2,000, max ₹10,000 + GST)
- Tenure: Up to 30 years
- Eligibility: Salaried, self-employed, NRIs
Why choose SBI? SBI offers competitive rates for women borrowers and pre-approved salaried individuals. Their “Home Loan Top-Up” facility is also attractive for existing customers.
2. HDFC Bank
- Interest Rate: 8.40% – 9.20%
- Processing Fee: Up to 0.50% of loan amount or ₹3,000, whichever is higher
- Tenure: Up to 30 years
- Eligibility: Salaried, self-employed
Special offer: Preferential rates for salaried professionals and existing HDFC customers. Flexible EMI options available.
3. ICICI Bank
- Interest Rate: 8.35% – 9.25%
- Processing Fee: 0.50% of loan amount
- Tenure: Up to 30 years
- Eligibility: Salaried, self-employed, NRIs
Key benefit: Minimal paperwork and pre-approved loan offers for existing ICICI customers.
4. Axis Bank
- Interest Rate: 8.45% – 9.35%
- Processing Fee: Up to 1% of loan amount (min ₹10,000)
- Tenure: Up to 30 years
- Eligibility: Salaried and professionals
USP: Axis offers digital loan approvals and quick disbursal with their e-home loan platform.
5. Kotak Mahindra Bank
- Interest Rate: 8.25% – 9.00%
- Processing Fee: Up to 0.50%
- Tenure: Up to 20 years
- Eligibility: Salaried and self-employed
Highlight: One of the lowest starting interest rates among private banks.
6. Punjab National Bank (PNB)
- Interest Rate: 8.40% – 9.15%
- Processing Fee: Nil under special offers
- Tenure: Up to 30 years
- Eligibility: General public, women, government employees
Why consider PNB? Zero processing fee under festival offers and additional concessions for women borrowers.
7. Bank of Baroda
- Interest Rate: 8.30% – 9.10%
- Processing Fee: ₹10,000 (waived during promotions)
- Tenure: Up to 30 years
- Eligibility: Salaried, pensioners, NRIs
Notable Feature: Offers a home loan takeover facility with minimal charges.
Tips to Get the Lowest Home Loan Rate
- Maintain a credit score of 750+
- Add a co-applicant to improve eligibility
- Compare fixed vs floating rates
- Choose banks offering concessions for women or salaried professionals
- Apply during festive offers for discounts
Floating vs Fixed Interest Rate – Which Is Better?
Floating Interest:
- Linked to repo rate or MCLR
- Can increase or decrease
- Usually lower starting rate
Fixed Interest:
- Same rate throughout the tenure
- EMIs remain stable
- Best for long-term planning
Recommendation: Opt for floating rate in a stable or declining interest rate market.
Bank-wise Home Loan Rate Comparison Table
| Bank | Interest Rate (%) | Processing Fee | Max Tenure |
|---|---|---|---|
| SBI | 8.30 – 9.15 | Up to ₹10,000 | 30 years |
| HDFC | 8.40 – 9.20 | ₹3,000 or 0.5% | 30 years |
| ICICI | 8.35 – 9.25 | 0.5% of loan amount | 30 years |
| Axis Bank | 8.45 – 9.35 | Min ₹10,000 | 30 years |
| Kotak Bank | 8.25 – 9.00 | 0.5% | 20 years |
| PNB | 8.40 – 9.15 | Nil (promo period) | 30 years |
| Bank of Baroda | 8.30 – 9.10 | ₹10,000 (may waive) | 30 years |
Key Takeaways
- Kotak Mahindra Bank offers one of the lowest starting rates.
- SBI and PNB provide extra benefits to women and government employees.
- Always compare processing fees along with interest rates.
- Floating rates are ideal when interest rates are stable or declining.
- Use an EMI calculator to check affordability before applying.
FAQs
Which bank is offering the lowest home loan interest rate in India in 2025?
Kotak Mahindra Bank and SBI are offering the lowest starting rates, around 8.25% – 8.30%.
Is it better to choose fixed or floating home loan rate in India?
Floating rates are better in a falling interest environment. Fixed rates offer stability for long-term budgeting.
Can I switch banks for a lower home loan interest rate?
Yes. Banks like Bank of Baroda offer balance transfer facilities at competitive rates and minimal fees.
External Reference
For updated repo rates and benchmark interest news, visit the RBI official website.
