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Compare Home Loan Rates Across Banks Research Team | Posted On Thursday, October 03,2019, 12:03 PM

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Compare Home Loan Rates Across Banks



Indian Banking is following a new loan pricing regime. From October 1st, lenders (banks) will link interest rates to an external benchmark. Yes, all banks will link floating rate retail and small business loans to an external benchmark as per the RBI mandate.

Large Banks have announced interest rates applicable to home loans and other products. Interest rates include three major components.

  • External Benchmark chosen
  • Spread fixed by bank
  • A small mark-up based on operational costs.

Many banks have chosen RBI repo rate as the External Benchmark, though banks can also choose the Treasury bill yields. Repo rate currently stands at 5.4%. The spread charged varies across public and private sector banks. The difference in spread between public and private sector banks is 65-80 basis points. (It used to be around 15-75 bps). This shows that home loans from a public sector bank like SBI is cheaper than private sector banks.

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Compare Home Loan Rates Across Banks

  • SBI Home Loan Rates

SBI which is India’s largest lender offers home loans at an effective rate of 8.2%.

Repo rate of 5.4% + Spread of 265 basis points + a mark-up of 15 basis points. This works out to 8.2%. The spread is basically operational and administrative costs. The mark up is basically for the borrower’s credit score. You get cheap SBI home loans if you have a good credit score. Check credit score and credit report at Banks are allowed to change the spread, only once in 3 years. The credit risk premium gets altered if your (customer’s) credit score increases/decreases by a large margin.

See Also: What Is Home Loan?

  • Bank of Baroda Home Loan Rates

You get Bank of Baroda Home Loans at 8.35-9.35%. This is basically a repo rate of 5.4% and a spread of 295 bps. The bank could then charge a strategic premium of 100 bps. The Bank of Baroda staff enjoy base home loan rates of 8.35%.

  • Bank of India Home Loan Rates

Bank of India charges a mark up of 285 bps. This is over the repo rate of 5.4%. The mark up accounts for operational and administrative expenses. Bank of India accounts for a credit risk premium of 25 bps if you have a good credit score above 760. If you have a credit score between 725-759, the risk premium is set at 30 bps. If your credit score is below 725, you are charged a risk premium of 40 bps. Expect bank of India home loan rates of around 8.5-8.65%.

  • Union Bank of India Home Loan Rates

You can get Union Bank of India Home Loan Rates at 8.25% to 8.3% for home loans between Rs 30-75 Lakhs. The bank charges a spread of 285 bps above repo rate. You will be charged 5 bps credit risk premium if you have a poor credit score. The Union Bank of India charges a fixed rate of 11.4% if you avail home loans under Rs 30 Lakhs.

See Also: How to Select The Best Home Loan in India? What Should I Consider?

ICICI Bank Home Loan Rates

ICICI Bank will charge a spread of 350-380 bps above the repo rate of 5.4%. This means an ICICI home loan rate of 8.9-9.2%. If you avail Rs 35 Lakh home loan, you end up paying home loan interest of 8.9-9.2%. ICICI Bank charges a 1% processing fee, over and above the interest rate.

  • Axis Bank Home Loan Rates

Axis Bank has a spread of around 345-390 bps. The spread depends on your credit score. You get Axis Bank home loan rates in the range of 8.85% to 9.3%.

See Also: What is Bank Guarantee?

  • HDFC Bank Home Loan Rates

HDFC Bank which is India’s largest private sector bank doesn’t have an external benchmark linked lending product, yet. HDFC Bank largely offers fixed rate loans for the retail lending portfolio. HDFC Bank believes there is little demand for floating rate loans. Aditya Puri, the Managing Director of HDFC Bank says that at the lowest point of the interest-rate cycle, people prefer fixed-rate loans rather than floating rate loans. Aditya Puri does not see floating rate deposit products picking up in India.


Salaried Customers Loan Bracket (Rs )

New Effective Rate (%)


Up to 30 Lakhs


Bank of Baroda

Up to 75 Lakhs


Union Bank of India

Between 30 to 75 Lakhs


Bank of India

All Home Loans


Axis Bank

All Home Loans



Up to 35 Lakhs


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