Banks, HFCs offer home loans rates between 7-12.6% in January 2026

Public banks remain cheapest, while private lenders and HFCs price loans higher

Home loan interest rates remain largely stable at the start of 2026, offering some relief to prospective homebuyers and existing borrowers considering a balance transfer. Across public sector banks, private lenders and housing finance companies (HFCs), rates currently start from a little over 7 per cent, though the final rate continues to depend heavily on borrower profile, loan size and credit score.

 

According to data compiled by Paisabazaar, public sector banks continue to offer some of the lowest starting rates in the market, particularly for salaried borrowers with strong credit histories.

 

Public sector banks: Starting rates close to 7 per cent

Among state-owned lenders, the lowest advertised rates start at around 7.10 per cent. State Bank of India, the country’s largest lender, is offering home loans in the range of 7.25–8.70 per cent across all ticket sizes. Bank of Baroda has marginally lower starting rates at 7.20 per cent, though rates can go up to 9.25 per cent for larger loans.

 

 

Other lenders such as Union Bank of India, Indian Bank and UCO Bank are offering loans starting from 7.15 per cent. Bank of Maharashtra and Central Bank of India have starting rates of 7.10 per cent, while Punjab and Sind Bank remains at the higher end, with rates going up to 10.70 per cent.

 

Several public sector banks are also offering small interest concessions for specific borrower categories, including women borrowers, salaried customers maintaining salary accounts, or those opting for loan takeover.

 

Private banks: Wider range, higher ceilings

Private sector banks continue to price loans higher than their public sector counterparts, especially at the upper end. ICICI Bank and Kotak Mahindra Bank are offering home loans starting at 7.65 per cent and 7.70 per cent, respectively. HDFC Bank’s rates start from 7.90 per cent.

 

However, some private lenders show a much wider spread. Axis Bank’s rates range from 8.35 per cent to as high as 11.90 per cent, while Bandhan Bank’s rates go up to 12.58 per cent, depending on borrower risk and loan size.

 

Housing finance companies: Competitive entry rates

Among HFCs, LIC Housing Finance and Bajaj Housing Finance are offering loans starting from 7.15 per cent, comparable with leading public sector banks. ICICI Home Finance follows closely at 7.50 per cent.

 

Others such as Tata Capital, Aditya Birla Capital and Godrej Housing Finance have starting rates of around 7.75 per cent. At the higher end, SMFG India Home Finance is offering loans from 10 per cent onwards.

 

Latest home loan rate table 

Name of Lender	Loan Amount (Rs)
	Upto 30 Lakh	30 Lakh+ & Upto 75 Lakh	Above 75 Lakh
PUBLIC SECTOR BANKS
State Bank of India	7.25-8.70	7.25-8.70	7.25-8.70
Bank of Baroda	7.20-9.00	7.20-9.00	7.20-9.25
Union Bank of India*	7.15-9.50	7.15-9.50	7.15-9.50
Punjab National Bank	7.25-9.10	7.20-9.00	7.20-9.00
Bank of India	7.10-10.00	7.10-10.00	7.10-10.25
Canara Bank**	7.25-10.00	7.20-10.00	7.15-9.90
UCO Bank***	7.15-9.25	7.15-9.25	7.15-9.25
Bank of Maharashtra	7.10-9.90	7.10-9.90	7.10-9.90
Punjab and Sind Bank	7.30-10.70	7.30-10.70	7.30-10.70
Indian Overseas Bank	7.10 onwards	7.10 onwards	7.10 onwards
Indian Bank	7.15-9.55	7.15-9.55	7.15-9.55
Central Bank of India	7.10-9.15	7.10-9.15	7.10-9.15
PRIVATE SECTOR BANKS
Kotak Mahindra Bank	7.70 onwards	7.70 onwards	7.70 onwards
ICICI Bank	7.65 onwards	7.65 onwards	7.65 onwards
Axis Bank	8.35-11.90	8.35-11.90	8.35-9.35
HSBC Bank	7.45 onwards	7.45 onwards	7.45 onwards
South Indian Bank	7.80 onwards	7.80 onwards	7.80 onwards
Karur Vysya Bank	8.50-10.65	8.50-10.65	8.50-10.65
Karnataka Bank	7.30-11.68	7.30-11.68	7.30-11.68
Federal Bank	8.75 onwards	8.75 onwards	8.75 onwards
Tamilnad Mercantile Bank	7.90 - 9.30	7.90 - 9.30	7.90 - 9.30
Bandhan Bank	8.41-12.58	8.41-12.58	8.41-12.58
RBL Bank	8.20 onwards	8.20 onwards	8.20 onwards
CSB Bank	8.05 onwards	8.05 onwards	8.05 onwards
HDFC Bank	7.90 onwards	7.90 onwards	7.90 onwards
City Union Bank	8.25-9.50	8.50-10.00	8.75-10.50
HOUSING FINANCE COMPANIES (HFCs)
LIC Housing Finance	7.15 onwards	7.15 onwards	7.15 onwards
Bajaj Housing Finance	7.15 onwards	7.15 onwards	7.15 onwards
Tata Capital	7.75 onwards	7.75 onwards	7.75 onwards
PNB Housing Finance	7.90 onwards	7.90 onwards	7.90 onwards
GIC Housing Finance	8.20 onwards	8.20 onwards	8.20 onwards
SMFG India Home Finance	10.00 onwards	10.00 onwards	10.00 onwards
Sammaan Capital  (Formerly Indiabulls Housing Finance)	8.75 onwards	8.75 onwards	8.75 onwards
Aditya Birla Capital	7.75 onwards	7.75 onwards	7.75 onwards
ICICI Home Finance	7.50 onwards	7.50 onwards	7.50 onwards
Godrej Housing Finance	7.75 onwards	7.75 onwards	7.75 onwards
*Extra interest rate concession of 0.05% to borrowers opting for insurance policy.  **Under CRG-Prime, CRG-1 & CRG-2, additional 5 bps concession for takeover/ready to move HL proposals & for salaried employees maintaining salary a/c with the bank.  ***Additional concession of 0.05% & 0.10% for women borrowers & takeover loans, respectively.
Rates as of 2nd Jan 2026
Source: Paisabazaar.com

What borrowers should keep in mind?

While headline rates appear attractive, borrowers should focus on the final rate offered, not the advertised minimum. Factors such as credit score, employment stability, property type and loan tenure play a decisive role. Comparing offers across banks and HFCs, and negotiating for concessions, can make a meaningful difference to long-term borrowing costs.