Cheapest Home Loan 2025: Owning a house is a dream for many, and home loans make only a step between home dreams and reality. You can save lakhs during the loan tenure by choosing the right bank that offers the lowest interest rates.
Furthermore, if you are looking to grab a home loan, this article will be a comparative guide between interest rates offered by four major lenders in India: SBI, PNB, HDFC, and ICICI Bank.
How are home loan interest rates determined?
Before looking at the different rates, let us first understand what decides them:
- Repo Rate & MCLR: The banks link their lending rates with the RBI’s repo rate and their MCLR (Marginal Cost of Funds Based Lending Rate) rates.
- Credit Score: Score with A higher CIBIL score (750) results in smaller interest rates.
- Loan Amount & Term: Larger loans or longer tenures may attract different rates.
- Employment Type: Salaried people get better rates as compared to those applying as self-employed.
- Property Type & Location: Banks can fiddle around with the rates as per the property value and location.
Now, let’s check out some of the best home loan interest rates being offered by these banks.
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State Bank of India (SBI) Home Loan Rates
SBI, India’s largest public sector bank, offers competitive home loan rates starting from 8.60% to 9.45% p.a. presently.
Key Features:
- Low processing fees compared to private lenders.
- Flexible repayment options with longer tenures (up to 30 years).
- Special discounts for women borrowers.
SBI is a good pick for salaried people seeking a moderately-priced home loan that comes with fixed interest rates.
Punjab National Bank (PNB) Home Loan Rates
Another trusted public-sector bank, under the PNB bank home loan rating, is between 8.40% to 10.60% p.a.
Key Features:
- Inexpensive interest rates at the start are what make PNB one of the cheapest home loan providers.
- Minimal documentation requirements for government employees.
- Offers balance transfer for home loans.
Check out PNB if you are considering a low-interest home loan from a government bank.
HDFC Bank Home Loan Rates
HDFC Bank, the largest private bank in India, offers home loans with interest rates from 8.50% to 9.40% per annum.
Key Features:
- Fast approval process with minimal documents.
- Special rates for top-up loans.
- Very suitable for those wanting speedy processing and digital services.
ICICI Home Loan Rates
Home loan rates offered by ICICI Bank range from 9.00% to 10.05% p.a.
Key Features:
- Flexible EMI options with step-up/step-down repayment plans.
- Instant approval for pre-approved customers.
- Doorstep service for document collection.
ICICI’s rates may be on the higher side, but they remain a popular option for many owing to their customer service and flexible repayment options.
Which Bank Offers the Cheapest Home Loan?
| Bank | Interest Rate (p.a.) | Best For |
|---|---|---|
| SBI | 8.60% – 9.45% | Low processing fees, long tenures |
| PNB | 8.40% – 10.60% | Lowest starting rate, government employees |
| HDFC | 8.50% – 9.40% | Fast processing, digital services |
| ICICI | 9.00% – 10.05% | Flexible EMI options, premium service |