Home Loan Interest Rate of all Banks:

Compare the lowest home loan interest rate starting from 6.67% p.a. and apply for the best home loan. Get the complete list of current housing loan rate of interest in India from all leading banks and financial institutions.

[table id=3 /]

How to Calculate Interest on Home Loan?

Generally, home loans are long-term loans and it is important to figure out your overall interest liability towards the loan at the first place. You can calculate the same using one of the two methods listed below:

1. EMI Calculator: You can calculate the interest amount applicable to your home loan by simply using a home loan EMI calculator. You will be required to fill up the fields provided on the calculator with the following details –

• Home Loan Amount
• Loan Repayment Tenure
• Rate of Interest

Once the details have been fed, you can click on the ‘Calculate’ button to get a detailed breakup of your loan including the amount payable towards interest.
2. EMI Calculation Formula: Alternatively, you can also use the following formula to calculate your EMI liability for your home loan-
EMI = [P x r x (1+r)^n]/[(1+r)^n-1]
Wherein, P is Principal, r is rate of interest, and n is number of instalments or loan tenure in months.

Types of Interest Rates in Home Loan:

There are mainly two types of home loan interest rates charged by most of the banks.

1. Fixed Interest Rate:

In this system of computation, the rate remains even throughout the loan tenor. There will be no change in the interest charges since the rate remains fixed. Depending on the offer, you may be allowed to switch over to the floating rate system after completing a certain duration into the loan tenure.

• Advantage of Fixed Interest Rate: Since the rate remains fixed, you know how much interest charges you’re paying upfront. Your loan will be shielded from frequent rate fluctuations and saves money in a longer run if there is a hike in lending rates.
• Disadvantage of Fixed Interest Rate: If the standard lending rates fall, you will not benefit since the interest component remains frozen.

2. Floating Interest Rate:

The interest charges on your home loan is subject to the current most lending rates of the bank. The rate is linked to the latest published rate of the bank which in turn depends on multiple factors such as RBIs monetary policy and lending rate revisions, the bank’s response to the revision etc.

• Advantage of Floating Interest Rate: The most visible perk of opting for the floating rate is that you have the advantage of being billed on the basis of the latest rate. If the rates fall, you save on interest charges.
• Disadvantage of Floating Interest Rate: In rare scenario, if the standard rates go up, the loan has to be bear the brunt of being billed a higher rate.

Note: The floating home loan interest rates are cheaper than the fixed home loan interest rates on the first front.

5 Things to Check Before Apply Home Loan:

The most important thing that you have look at is the cost of the house and the way you plan to finance it. There are many banks in India that offer amazing home loan schemes at affordable rates of interest. If you are confused and unable to decide which scheme you should apply for, then you must follow the rules mentioned below:

1. Compare Interest Rates: If you find a home loan scheme with the lowest rate of interest, do not apply for it in a haste. Look at all the terms and conditions associated with the scheme and try to find out why the rate is so low compared to other house loans. Experts advise people to compare the interest rates of different house loan schemes before applying.
2. Read Lender’s History: Before you borrow a home loan from a bank or any other lender, ensure that you are familiar with its history. Loans are a liability and can result in huge financial problems if you borrow money from an unknown or untrusted lender. You have to look for news about the different lenders online, read up on their history and check out reviews of the services and products they offer. You can also contact mortgage brokers or experts to find out information about any lender.
3. Make a Down Payment: While applying for a home loan, ensure that you make a down payment. Do not be attracted by schemes that do not require any down payment. If you apply for a home loan without paying any money upfront, then you might not realise and pay more interest. Also, the more money you pay as down payment, the lower your EMIs will be, which means that you will be able to repay your loan earlier.
4. Read the Fine Print: It is very important that you read the fine print before you take a home loan. It may look long and you may be lazy, but reading it will save you from future shocks. The fine print document will contain all the information and term and conditions related to the loan you plan to apply for. If you are unable to understand the clauses mentioned in this document, then ask the help of a Chartered Accountant.
5. Understand the Fees and Charges: There are many fees and charges associated with a home loan such as late payment fee, prepayment fee, processing fee, legal charges, documentation charge, etc. You should make yourself aware of all these fees and charges. Ask the lender to give you a list of all the fees in writing.

These are only some of the many rules that you must follow while applying for a home loan. Apart from the above, you should also find out about the tax benefits on home loan and how you can claim them. Once you get your home loan, make sure you pay the EMI on time every month.