Home loan rates steady in Sept; state-owned banks offer best rates

Customers should check processing fees, prepayment charges, eligibility criteria

Home loan rates in September will largely stay steady. Public-sector banks offer the most competitive rates — as low as 7.35 per cent, according to data from Paisabazaar.com.

 

Public-sector banks

 

For loans up to Rs 30 lakh, State Bank of India, Punjab National Bank, and Canara Bank offer rates starting 7.50 per cent. Bank of Baroda and Union Bank of India have similar entry rates at 7.45 per cent and 7.35 per cent respectively.

 

Some state-owned banks offer concessions:

 

• UCO Bank provides a 0.05-0.10 per cent concession for women borrowers and takeover loans. 
• Canara Bank offers an additional 5 basis points discount for salaried employees with salary accounts and takeover/ready-to-move proposals.

 

These concessions could bring effective rates below 7.5 per cent for eligible borrowers. 

 

 

Private banks and HFCs

Private-sector banks are quoting slightly higher rates, with most starting between 7.70 and 8.50 per cent. ICICI Bank, HDFC Bank and HSBC are among the most competitive, starting from 7.70-7.90 per cent. However, banks such as Bandhan Bank and CSB Bank have upper ranges going above 11 per cent, making rate comparison crucial.

 

Housing finance companies (HFCs) are also offering competitive rates, with LIC Housing Finance, ICICI Home Finance and Bajaj Housing Finance starting at 7.45-7.50 per cent. However, some HFCs like SMFG India Home Finance have rates beginning at 10 per cent, significantly higher than leading banks.

 

Latest home loan rate in September  

Name of Lender	Loan Amount (Rs)
	Upto 30 Lakh	Above 30 Lakh & Upto 75 Lakh	Above 75 Lakh
PUBLIC SECTOR BANKS
State Bank of India	7.50-8.95	7.50-8.95	7.50-8.95
Bank of Baroda	7.45-9.25	7.45-9.25	7.45-9.50
Union Bank of India*	7.35-10.00	7.35-10.00	7.35-10.00
Punjab National Bank	7.50-9.35	7.45-9.25	7.45-9.25
Bank of India	7.35-10.10	7.35-10.10	7.35-10.35
Canara Bank**	7.50-10.25	7.45-10.25	7.40-10.15
UCO Bank***	7.40-9.50	7.40-9.50	7.40-9.50
Bank of Maharashtra	7.35-10.15	7.35-10.15	7.35-10.15
Punjab and Sind Bank	7.55-10.75	7.55-10.75	7.55-10.75
Indian Overseas Bank	7.35 onwards	7.35 onwards	7.35 onwards
Indian Bank	7.40-9.40	7.40-9.40	7.40-9.40
Central Bank of India	7.35-9.40	7.35-9.40	7.35-9.40
PRIVATE SECTOR BANKS
Kotak Mahindra Bank	7.99 onwards	7.99 onwards	7.99 onwards
ICICI Bank	7.70 onwards	7.70 onwards	7.70 onwards
Axis Bank	8.35-11.90	8.35-11.90	8.35-9.35
HSBC Bank	7.70 onwards	7.70 onwards	7.70 onwards
South Indian Bank	7.75 onwards	7.75 onwards	7.75 onwards
Karur Vysya Bank	8.50-10.90	8.50-10.90	8.50-10.90
Karnataka Bank	8.19-10.74	8.19-10.74	8.19-10.74
Federal Bank	8.75 onwards	8.75 onwards	8.75 onwards
Tamilnad Mercantile Bank	8.15-9.50	8.15-9.50	8.15-9.50
Bandhan Bank	8.41-15.00	8.41-12.58	8.41-12.58
RBL Bank	8.20 onwards	8.20 onwards	8.20 onwards
CSB Bank	9.39-11.08	9.39-11.08	9.39-11.08
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	7.50 onwards	7.50 onwards	7.50 onwards
Bajaj Housing Finance	7.45 onwards	7.45 onwards	7.45 onwards
Tata Capital	7.75 onwards	7.75 onwards	7.75 onwards
PNB Housing Finance	8.25-11.50	8.25-11.50	8.25-10.85
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	8.25 onwards	8.25 onwards	8.25 onwards
ICICI Home Finance	7.50 onwards	7.50 onwards	7.50 onwards
Godrej Housing Finance	8.55 onwards	8.55 onwards	8.55 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 10th September 2025
Source: Paisabazaar.com

 

What this means for borrowers

With rates largely steady, borrowers may want to compare offers across lenders rather than wait for further cuts. Experts say that state-owned banks have the lowest rates for first-time homebuyers and those seeking cheaper loans. Those with higher loan amounts or a preference for faster processing might consider private banks or HFCs despite slightly higher rates.

 

Borrowers should also look at processing fees, prepayment charges, and eligibility criteria in addition to interest rates before finalising a lender.