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Banks and Housing Finance Companies (HFCs) provide home loans ranging from 75% to 90% of the property’s value, contingent on the applicant’s credit profile and adhering to the Loan-to-Value (LTV) ratios set by the lenders and the RBI. These loans can have tenures extending up to 30 years. At Makaan Finance, we assist you in comparing home loan interest rates and other features offered by leading banks and HFCs, enabling you to apply online for the most suitable option based on your credit profile.
| Home Loan Details | |
|---|---|
|
Interest Rates |
Starting from 8.35% p.a. |
|
Loan Amount |
Varies on case-to-case basis |
|
LTV Ratio |
Up to 90% of the property value |
|
Tenure |
Up to 30 years with some lenders extending till 40 years |
|
Processing Fee |
1% to 2% of the loan amount (may vary across lenders) |
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A home loan is a secured loan that banks and Housing Finance Companies (HFCs) offer for purchasing, constructing, renovating, repairing, or extending an existing or new residential property. This loan is secured by the property itself until it is fully repaid. If the borrower defaults, the lender has the legal right to seize the property and auction it to recover the unpaid loan amount.
Home loan interest rates for applicants are determined by various factors including their credit scores, monthly income, loan amount, LTV ratio, job profile, and the reputation of their employer.
| Name of Lender | Up to Rs. 30 Lakh | Above Rs. 30 Lakh & Up to Rs. 75 Lakh | Above Rs. 75 Lakh |
|---|---|---|---|
| Bank of Baroda | 8.40% - 10.65% | 8.40% - 10.65% | 8.40% - 10.90% |
| Punjab National Bank | 8.45% - 10.25% | 8.40% - 10.15% | 8.40% - 10.15% |
| Punjab & Sind Bank | 8.50% - 10.00% | 8.50% - 10.00% | 8.50% - 10.00% |
| SBI | 8.50% - 9.85% | 8.50% - 9.85% | 8.50% - 9.85% |
| Union Bank of India | 8.35% - 10.75% | 8.35% - 10.90% | 8.35% - 10.90% |
| Bank of India | 8.40% - 10.85% | 8.40% - 10.85% | 8.40% - 10.85% |
| UCO Bank | 8.45% - 10.30% | 8.45% - 10.30% | 8.45% - 10.30% |
| Bank of Maharashtra | 8.35% - 11.15% | 8.35% - 11.15% | 8.35% - 11.15% |
| Canara Bank | 8.50% - 11.25% | 8.45% - 11.25% | 8.40% - 11.15% |
| Indian Overseas Bank | 8.40% - 10.60% | 8.40% - 10.60% | 8.40% - 10.60% |
Note: Interest rates as of 24 June 2024
| Name of Lender | Up to Rs. 30 Lakh | Above Rs. 30 Lakh & Up to Rs. 75 Lakh | Above Rs. 75 Lakh |
|---|---|---|---|
| HDFC Bank Ltd. | 8.70% onwards | 8.70% onwards | 8.70% onwards |
| Kotak Mahindra Bank | 8.70% onwards | 8.70% onwards | 8.70% onwards |
| ICICI Bank | 8.75% onwards | 8.75% onwards | 8.75% onwards |
| Axis Bank | 8.75% – 13.30% | 8.75% – 13.30% | 8.75%- 9.65% |
| Karur Vysya Bank | 9.00% - 11.05% | 9.00% - 11.05% | 9.00% - 11.05% |
| South Indian Bank | 8.70% - 11.70% | 8.70% - 11.70% | 8.70% - 11.70% |
| Karnataka Bank | 8.50% - 10.62% | 8.50% - 10.62% | 8.50% - 10.62% |
| Federal Bank | 8.80% onwards | 8.80% onwards | 8.80% onwards |
| Dhanlaxmi Bank | 9.35% - 10.50% | 9.35% - 10.50% | 9.35% - 10.50% |
| Tamilnad Mercantile Bank | 8.60% - 9.95% | 8.60% - 9.95% | 8.60% - 9.95% |
| Bandhan Bank | 9.16% - 15.00% | 9.16% - 13.33% | 9.16% - 13.33% |
| RBL Bank | 8.90% onwards | 8.90% onwards | 8.90% onwards |
Note: Interest rates as of 24 June 2024
| Name of Lender | Up to Rs. 30 Lakh | Above Rs. 30 Lakh & Up to Rs. 75 Lakh | Above Rs. 75 Lakh |
|---|---|---|---|
| LIC Housing Finance | 8.50% – 10.35% | 8.50% – 10.55% | 8.50% – 10.75% |
| Tata Capital | 8.75% onwards | 8.75% onwards | 8.75% onwards |
| PNB Housing Finance | 8.50% - 14.50% | 8.50% - 14.50% | 8.50% - 11.45% |
| Repco Home Finance | 10.00% onwards | 10.00% onwards | 10.00% onwards |
| GIC Housing Finance | 8.80% onwards | 8.80% onwards | 8.80% onwards |
| Indiabulls Housing Finance | 8.75% onwards | 8.75% onwards | 8.75% onwards |
| Aditya Birla Capital | 8.60% onwards | 8.60% onwards | 8.60% onwards |
| ICICI Home Finance | 9.10% onwards | 9.10% onwards | 9.10% onwards |
| Godrej Housing Finance | 8.55% onwards | 8.55% onwards | 8.55% onwards |
| L&T Finance Limited | 8.65% onwards | 8.65% onwards | 8.65% onwards |
Note: Interest rates as of 24 June 2024
| Name of Lender | Up to Rs. 30 Lakh | Above Rs. 30 Lakh & Up to Rs. 75 Lakh | Above Rs. 75 Lakh |
|---|---|---|---|
| HSBC | 8.50% onwards | 8.50% onwards | 8.50% onwards |
| Standard Chartered Bank | 8.95% onwards | 8.95% onwards | 8.95% onwards |
The Home Loan EMI calculator is a handy tool that enables individuals to quickly compute their monthly loan installments. This tool not only helps in calculating the monthly payments but also assists consumers in determining the total interest cost and overall amount payable by trying out various combinations of interest rates, loan amounts, and tenures. By leveraging this online calculator, users can also figure out the optimal loan tenure that aligns with their repayment capacity.
To calculate the EMI on your home loan, you can use the formula:
EMI=P×R×(1+R)N(1+R)N−1\text{EMI} = \frac{P \times R \times (1+R)^N}{(1+R)^N – 1}
where:
Manual calculations can be error-prone, complex, and time-consuming, so using an online loan EMI calculator is preferable. This calculator requires only a few basic details such as the interest rate, loan amount, and loan tenure.
Once these details are entered, the EMI amount is calculated instantly. Additionally, the calculator provides the total interest amount and an amortization schedule for easy reference.
The processing fees and charges for a housing loan can differ significantly depending on the lender and the applicant’s credit profile. To provide a clear understanding of the associated costs, refer to the table below:
| Particulars | Charges |
|---|---|
| Processing Fee | 1% – 2% of loan amount |
| Foreclosure/Prepayment Charges | For floating rate: Nil |
| Foreclosure/Prepayment Charges | For fixed rate: Around 2% – 4% on the principal outstanding |
| Overdue Charges on EMI | 2% per month of the unpaid EMI |
| EMI Bounce Charges | Around Rs 400 |
| Legal Fee | As per Actuals |
Lenders may also impose additional fees and charges, such as documentation fees, verification charges, duplicate statement fees, and charges for obtaining a No Objection Certificate (NOC).
Home loan eligibility criteria vary among different lending institutions and loan schemes. However, a general set of criteria is outlined below:
Note: Your home loan eligibility is also influenced by the specific property you intend to purchase and its location.
Lenders require various documents from home loan applicants to verify their identity, place of residence, income, and repayment capacity. These documents can differ among lenders based on the applicant’s credit profile, property type, home loan type, etc. Below are the essential documents that applicants typically need to provide when applying for a home loan:
Identity Proof Documents: A copy of any one of the following:
Age Proof Documents: A copy of any one of the following:
Address Proof Documents: A copy of any one of the following:
Income Proof Documents:
| Income Documents for Salaried | Income Documents for Self Employed |
|---|---|
| Copy of Form 16 | Business License Details |
| Latest Payslips | Proof of Business Address |
| IT returns (ITR) of past 3 years | ITR of last 3 years |
| Investment Proofs (if any) | Balance Sheet and Profit & Loss Account Statement of the Company/Firm |
Property-related Documents: NOC from Society/Builder, detailed estimate of the cost of construction of the house, registered sale deed, allotment letter, and an approved copy of the building plan.
Proof of Identity: Passport with VISA stamps / PIO Card
Proof of Address: Government document mentioning the current overseas address
Proof of Income Documents:
| Income Documents for Salaried | Income Documents for Self-Employed |
|---|---|
| Salary Certificate/ Latest Payslips (in English) | Latest ITR, Bank Statements of Overseas Account and Balance Sheets and P&L Accounts audited or certified by a C.A. |
| Latest bank statements showing salary credits NRE / NRO account (if any) | A copy of Continuous Discharge Certificate (CDC) for applicants employed in the merchant navy |
| Work Permit/ Employment Contract / Appointment Letter / Offer Letter (Duly attested by employer/ Consulate / foreign office / embassy in case it is in any other language) | Business License & Address Proof / License of Professional Practice (for Doctors, Consultants, etc.) |
| Form P60/P45 and latest employment contract (for salaried) | Registration Certificate of Establishment (For Shops, Factories & Other Establishments) |
Property Documents:
Other Documents:
Note: The above list is indicative and your lender might ask for additional documents.
Home loan borrowers can take advantage of multiple tax benefits under different sections of the Income Tax Act. These benefits help in reducing the overall financial burden by allowing borrowers to save a significant amount each year. Here are the tax benefits available on home loan EMI payments:
| Section of Income Tax Act | Nature of Home Loan Tax Deduction | Max. Tax Deductible Amt. |
|---|---|---|
| Section 24(b) | Interest paid | Rs. 2 lakh |
| Section 80C | Principal (including stamp duty and registration fee) | Rs. 1.5 lakh |
| Dos | Don'ts |
|---|---|
| Keep your credit score at 750 or above | Apply for home loan without checking your credit score |
| Limit your total EMI obligations within 50-60% of your net monthly income | Use emergency fund for making higher down payment |
| Compare home loan offers from various lenders | Apply with multiple lenders within a short span |
| Try making larger down payment to reduce LTV ratio | Forgo existing investments for making higher down payment |
| Add a co-applicant for higher loan eligibility | Plan EMI payments without considering the monthly contributions you need to make towards your crucial financial goals |
If your home loan application was turned down, consider these steps to increase your chances of approval next time:
Boost your chances of securing a home loan by following these tips:
Home loans are available to all resident and non-resident Indians (NRIs). Both salaried and self-employed professionals or non-professionals can apply for a home loan.
Consumers can apply for home loans directly from banks and housing finance companies (HFCs). Many lenders offer online application processes through their websites, mobile apps, or internet banking platforms. Alternatively, you can use online financial marketplaces to compare and apply for home loans from multiple lenders based on your credit profile.
Home loan interest rates start from 8.35% per annum. The final interest rate offered will depend on factors such as your credit score, loan amount, employment profile, employer’s profile, and the loan-to-value (LTV) ratio.
The eligible loan amount is determined by the EMI/NMI (Equated Monthly Installment/Net Monthly Income) Ratio and the LTV Ratio, which vary across lenders. Visit your lender’s website and use their home loan eligibility calculator or check online financial marketplaces to get an estimate.
The required property documents vary based on the purpose of the loan, such as buying a new house or constructing one. Generally, you will need documents like the sale deed, allotment letter, NOC from society/builder, detailed construction cost estimate, and an approved building plan.
The best bank for a home loan offers the lowest interest rates, helping you save on overall interest costs. Additionally, consider factors such as loan tenure, LTV ratio, processing fees, and the time taken for loan approval and disbursal. Online financial marketplaces can help you compare these features across multiple lenders.
No, according to the Reserve Bank of India (RBI) guidelines, the maximum Loan-to-Value (LTV) ratio is capped. For loan amounts up to Rs 30 lakh, the LTV ratio can go up to 90% of the property value. For loans between Rs 30 lakh and Rs 75 lakh, it can go up to 80%, and for loans above Rs 75 lakh, it can go up to 75%. The remaining amount must be paid as a down payment by the borrower.
Lenders use methods like the Multiplier Method and EMI/NMI Ratio to determine your maximum home loan eligibility. Typically, loan amounts can be up to 72 times your gross monthly income or 6 times your gross annual income. Some lenders also use a combination of both methods.
Lenders evaluate the repayment capacity by ensuring the total EMI obligations, including the proposed home loan EMI, are within 50-60% of your monthly income. You can use online EMI calculators to determine the optimal loan amount and tenure based on your repayment capacity.
It varies by lender, as each has different credit risk policies. Consumers with low credit scores should compare housing loan rates and features on online marketplaces to find the best options.
A credit score of 750 and above is preferred by lenders, as it indicates responsible credit behavior and lower credit risk. High credit scores often result in lower interest rates. Some lenders may offer loans to applicants with lower scores but at higher interest rates.
The EMI depends on the interest rate and loan tenure. For example, at an interest rate of 8.50% per annum and a tenure of 20 years, the EMI for a Rs. 20 lakh home loan would be Rs. 17,356. Use online EMI calculators to compute EMIs for different tenures and interest rates.
Spouses or blood relatives such as parents, siblings, and children can co-sign a home loan. All co-owners of the property must be co-applicants in the loan.
For floating rate home loans, lenders do not charge prepayment penalties as per RBI directives. Fixed rate home loans may incur prepayment penalties.
A home loan balance transfer allows borrowers to transfer their outstanding home loan to another lender offering lower interest rates or better terms. This is beneficial for those who initially took loans at higher interest rates but now qualify for lower rates.
Yes, if the second lender is satisfied with your repayment capacity, credit profile, and the characteristics of the pledged property, you can avail a second home loan.
It usually takes 1 to 2 weeks for lenders to sanction a home loan. This can vary based on the lender’s approval process, the applicant’s credit profile, and the property features.
A fixed rate home loan has a constant interest rate throughout the loan tenure, shielding you from interest rate increases but not allowing benefits if rates drop. A floating rate home loan’s interest rate changes with market rates, generally making it cheaper, and the RBI mandates no prepayment charges for floating rate loans.
Yes, you can prepay your home loan. Floating rate loans have no prepayment charges, while fixed rate loans may have charges ranging from 2% to 4%.
Yes, you can get tax deductions on the principal repayment under Section 80C and on the interest component under Section 24(b) of the Income Tax Act.
Yes, most lenders allow you to switch from a fixed rate to a floating rate and vice versa, typically for a conversion fee.
Under the Pradhan Mantri Awas Yojana-Gramin scheme, beneficiaries can avail a maximum home loan amount of up to Rs 70,000.
