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HomeBusinessTake a look at banks and housing finance companies that are offering...

Take a look at banks and housing finance companies that are offering the lowest interest rates on home loans.

With home loan interest rates starting at 6.5 percent, it is time for those who are paying substantially higher rates to switch lenders

India’s largest bank SBI, too, has announced a festival bonanza for new as well as balance transfer borrowers.  

Borrowers with high credit scores will now get an interest rate of 6.7 percent, irrespective of the loan amount. It has waived off processing fees as well as premium on interest charged to non-salaried borrowers.

Many borrowers continue to be tied to their old loans that are linked to Base Rate or Marginal Cost of funds-based Lending Rates (MCLR), unlike the newer loans that are pegged to an external benchmark, which is RBI’s Repo Rate for most banks.

The external benchmark-linked loans are easier to understand and ensure that policy rate changes are transmitted transparently. Banks have no choice but to pass on any repo rate cut benefits to borrowers.

In a benign interest rate scenario, this means cheaper loans for borrowers. Take a look at banks and housing finance companies that are offering the lowest interest rates on home loans, as per data compiled by Moneycontrol.com and www.bankbazaar.com.

Kotak Mahindra Bank This private sector bank has been offering the cheapest rate in the home loan space since November last year. It charges 6.5 percent for a Rs 75-lakh loan with a 20-year tenure. The equated monthly installment (EMI) works out to Rs 55,918.

Punjab & Sind matches Kotak Mahindra Bank’s deal and is ahead of its public sector peers, offering an interest rate of 6.65 percent.

SBI has announced festive offers to attract new borrowers as well as those of other banks who may wish to switch. Interest rates for those with credit scores of over 800 start at 6.7 percent, across loan slabs.

A recent entrant into the Moneycontrol-Bankbazaar’s cheapest lenders’ list, Tata Capital charges an interest rate of 6.7 percent for a home loan of Rs 75 lakh with a tenure of 20 years. The EMI will work out to Rs 56,805.

Next on the list is public sector Bank of Baroda (BoB) with home loan interest rates starting at 6.75 percent. The state-owned bank, too, has announced its festive offer, which includes waiver of processing fees. If you were to take a Rs 75-lakh home loan with a tenure of 20 years, your EMI will amount to Rs 57,027.

This HFC’s lowest interest rate is at par with that of BoB. Its rate is lower than that of India’s largest mortgage lender HDFC (7 percent).

Bajaj Finserv

This public sector bank’s home loan offering figures in the list of five lowest interest rates on offer at the moment. It charges an interest rate of 6.8 percent, which means the borrowers will have to pay an EMI of Rs 57,250. Indian Bank, too, offer the same interest rate.

Punjab National Bank

This public sector bank’s home loan offering figures in the list of five lowest interest rates on offer at the moment. It charges an interest rate of 6.8 percent, which means the borrowers will have to pay an EMI of Rs 57,250. Indian Bank, too, offer the same interest rate.

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