Most of the people aspire to live in the dream home but wait for the right time when they’ll be in a position to buy one with the wealth accumulated in the lifetime. Throughout the life, they save money in hope that one day they will own a house. But by the time they accumulate the amount, the economic condition change and prices soar. Which in turn results in further postponing the plans of moving into a self-owned home. Mind it, whenever you get a home of your choice just book it and the finance could be arranged easily by taking a home loan. There are number of banking and financial institutions that can assist you buying your dream home. But before choosing the financiers compare the housing loan interest rates charged by them. This will help you get the best deals and reduce the burden of repayment.
It is always advisable that the borrower must check the lending rates of various banks and housing companies before availing a credit facility. It is only after going through the rates and other product features that the borrower must select the lender and apply for the loan. The borrower must even calculate the repayment amount as this will help him plan the future expenses and save him from defaulting. The borrower can calculate the repayment amount by using the fixed deposit calculator.
In the further article, the housing loan interest rates of various banks and the method of calculating interest is discussed.
Home Loan Interest Rates Offered by Various Banks:
The housing loan interest rates of various banks are as follows:
State Bank of India-
The State Bank of India offers home loans at an attractive rate of interest. It charges interest at both fixed and floating rates. The fixed rate of interest on the loan amount up to ₹ 30 Lacs for first 2 years for women borrowers is 8.50% p.a. and for others, it is 8.55% p.a. While the floating rate of interest is as follows:
- Up to ₹ 75 lacs: The interest rate for women borrowers is 8.60% p.a. and for others, it is 8.65% p.a.
- Above ₹ 75 lacs: The interest rate for women borrowers is 8.65% p.a. and for others, it is 8.70% p.a.
The HDFC Bank provides housing loans at reasonable rates and for longer tenure lasting up to 30 years. The lending rates variates as per the slab. The rates prevalent on various loan amount are as follows:
- Up to 75 lakhs – For women applicants, the rate of interest ranges from 8.65 to 9.15% p.a. while for others it is 8.70 to 9.20% p.a.
- Above ₹ 75 lacs – The rate fluctuates from 8.70 to 9.20% p.a. for women applicants and for others it is 8.75 to 9.25% p.a.
At ICICI Bank, one can avail loan up to ₹ 3,00,00,000 for the maximum period of 20 years. The loan is charged at both fixed and floating interest rate. For women borrowers the floating interest rate variates from 8.65 to 8.80% p.a. and fixed rate ranges from 8.70 to 10.05% p.a. On the loan of amount up to ₹ 28 lacs, the rate of interest for weaker section borrower is 8.65% p.a. However, the floating rate of interest on loan availed by salaried and self-employed individuals ranges from 8.70 – 8.85% p.a. And the fixed rate variates from 8.70 – 10.10% p.a.
These were the rates offered by some of the banking institutes. But now it is important to know how are these rates determined or what are the factors that affect the interest rates. The factors that contribute to the determination of housing loan interest rate are mentioned below:
Factors Affecting Home Loan Interest Rate:
Income– The income of the applicant is the major factor that helps in deciding the loan eligibility and the rate of interest. The salary or the revenue earned by the applicant during a financial year is a major concern of all the lenders. The applicants with high income get loans at an attractive rate of interest.
Credit History– Another important factor that helps in deciding the lending rate is the credit history of the applicant. The applicant having clear records and good credit score are likely to get a loan at pleasing rates.
Location of Property– Unlike other loans, in a home loan the location and the surroundings of property make much of a difference. Even the name of builder/agency you are purchasing home from impacts the eligibility and rate of interest. So, it is advisable to buy a house from the trusted builders.
Value of Property – The value of property too affects the housing loan interest rates.