Mid-Dec home loan rates start at 7.10%: Top lenders' offers and EMIs

Public-sector banks have the lowest entry rates but borrowers should note that private banks and HFCs maintain wider rate spreads

Home loan rates are largely unchanged in mid-December from the previous month, as lenders price terms based on borrower profile and loan size. Public-sector banks offer the most competitive rates (above 7 per cent), according to data compiled by Paisabazaar.com (rates as of December 10).

 

Private banks and housing finance companies (HFCs) have higher rates but they may have easier terms.

 

Highlights:

 

-Bank of Maharashtra and Central Bank of India offer some of the lowest starting rates at 7.10 per cent across loan slabs.

 

-Union Bank of India and Bank of India have wider ranges that move up to 10 per cent and above for lower-score borrowers.

 

-Punjab National Bank and Bank of Baroda remain in the mid-7 per cent bracket at the floor level.

 

-State Bank of India, the largest home loan lender, maintains a uniform band of 7.50–8.95 per cent irrespective of the loan amount.

 

Certain PSBs are also offering small concessions. UCO Bank provides a 0.05–0.10 percentage point reduction for women and takeover borrowers, while Canara Bank offers incremental concessions for select credit categories.

 

Private banks

 

Private banks have higher interest rates and wider spreads for borrowers with weaker credit profiles.

 

-HDFC Bank, ICICI Bank and Kotak Mahindra Bank begin at 7.65–7.90 per cent, keeping their lowest rates competitive with PSBs.

 

-Mid-tier private banks such as Karur Vysya Bank, Bandhan Bank and RBL Bank display broader pricing, with starting rates between 8–8.4 per cent and upper limits extending beyond 12 per cent in some cases.

 

-Federal Bank’s starting rate of 8.75 per cent places it at the higher end of the large private lenders.

 

This divergence underscores the stronger use of risk-based pricing in the private banking segment.

 

Housing finance companies

 

HFCs remain an important channel for borrowers who may not secure the most competitive bank rates.

 

-Large HFCs, such as LIC Housing Finance, Bajaj Housing Finance and ICICI Home Finance, start at 7.40–7.50 per cent, keeping them aligned with lower-cost bank options.

 

-Others, including PNB Housing Finance, GIC Housing Finance and Tata Capital, operate in the 7.75–11.50 per cent range.

 

-Specialist and mid-sized HFCs such as SMFG India Home Finance begin at 10 per cent and above.

 

With spreads remaining wide, borrowers need to compare options carefully. The lowest rates are typically reserved for individuals with high credit scores, stable income profiles and lower loan-to-value ratios.

 

What homebuyers should do

• Compare both minimum and maximum rate ranges, not just the starting rate.
• Factor in concessions for women borrowers, salary account holders and takeover loans.
• Review reset frequency and benchmark (repo-linked or internal rate).