Buying a home is one of the biggest financial decisions anyone makes in their lifetime. As property prices continue to rise, most people rely on home loans to afford their dream house. But the most important factor that decides the total cost of your loan is the interest rate. Even a small difference of 0.25% can save (or cost) you lakhs of rupees over the loan tenure.
In 2025, the home loan market in India has become extremely competitive. Several top banks—both private and public—are offering attractive interest rates to attract new borrowers. Whether you are a first-time homebuyer, planning to switch your existing loan, or looking to buy a second property, comparing home loan interest rates is essential.
This guide will help you understand the best home loan interest rates in India in 2025, along with a complete bank comparison, eligibility, documents required, and tips to get the lowest rate possible.
Why Home Loan Interest Rates Matter So Much
A home loan usually lasts 15–30 years. Even a small difference in interest rates can create a huge impact on your total repayment.
For example:
- Loan amount: ₹40,00,000
- Tenure: 20 years
- Interest rate difference: 0.50%
This small difference can cost you ₹2–4 lakh extra over the entire tenure.
That’s why checking multiple banks and comparing offers is extremely important before choosing a lender.
Types of Home Loan Interest Rates in India
Before comparing banks, you should understand the two main types of interest rates:
1. Fixed Interest Rate
- Remains constant throughout the loan tenure
- EMI does not change
- Slightly higher rate
- Good for long-term stability
2. Floating Interest Rate
- Moves according to RBI repo rate
- Lower than fixed rates
- EMI may go up or down
- Most popular option in India
Majority of banks now offer floating-rate home loans.
Best Home Loan Interest Rates in India 2025 – Bank Comparison Table
Below is the realistic and updated comparison for 2025:
| Bank | Interest Rate (2025) | Processing Fee | Best For |
|---|---|---|---|
| SBI | 8.40% onwards | Low | Government & salaried buyers |
| HDFC Bank | 8.50% onwards | Moderate | Quick approval |
| ICICI Bank | 8.45% onwards | Moderate | Flexible repayment |
| Axis Bank | 8.60% onwards | Medium | Fast processing |
| Kotak Bank | 8.35% onwards | Low | Lowest interest rates |
| Bank of Baroda | 8.45% onwards | Low | Affordable loans |
| Punjab National Bank | 8.55% onwards | Low | First-time buyers |
| Canara Bank | 8.50% onwards | Low | Government employees |
| IDFC First Bank | 8.65% onwards | Medium | Digital approval |
| Union Bank | 8.40% onwards | Low | Reliable & safe |
Rates vary depending on credit score, salary, loan amount, and property type.
Detailed Home Loan Comparison (2025)
1. SBI Home Loan
SBI continues to be India’s most popular home loan provider because of its low interest rates and transparent policies.
Features:
- Interest rate: 8.40% onwards
- No hidden charges
- Flexible tenure up to 30 years
- Lowest risk for borrowers
2. HDFC Home Loan
HDFC is known for quick processing and wide acceptance for all property types.
Highlights:
- Interest rate: 8.50% onwards
- Digital document upload
- Pre-approved home loan facility
- Strong customer service
3. ICICI Bank Home Loan
ICICI offers faster processing and multiple repayment options.
Benefits:
- 8.45% onwards
- Balance transfer facility
- Flexible EMI plans
- Good for salaried & self-employed
4. Axis Bank Home Loan
Axis is preferred by professionals and first-time homebuyers.
Features:
- 8.60% onwards
- Quick disbursal
- Simple eligibility
- Good online tools
5. Kotak Mahindra Bank Home Loan
Kotak often offers the lowest interest rates in India.
Key Points:
- 8.35% onwards
- Minimal processing fee
- Easy eligibility
- Fast approval
6. Bank of Baroda Home Loan
BoB offers attractive interest rates with zero hidden charges.
Benefits:
- 8.45% onwards
- Zero processing fee (promotional)
- Good for all income types
7. Punjab National Bank Home Loan
PNB is known for stable home loan rates.
Features:
- 8.55% onwards
- Low processing fee
- Popular in Tier 2 & Tier 3 cities
8. Canara Bank Home Loan
Canara offers value-for-money home loans with strong eligibility.
Highlights:
- 8.50% onwards
- Good for salaried professionals
- Safe government-backed bank
9. IDFC First Bank Home Loan
IDFC is one of the fastest digital home loan providers.
Features:
- 8.65% onwards
- Paperless approval
- Instant sanction letters
10. Union Bank Home Loan
Union Bank provides very competitive interest rates.
Benefits:
- 8.40% onwards
- Low fees
- Good customer support
Eligibility for Home Loans in 2025
- Age 21 to 65
- Minimum income ₹25,000 monthly
- 2 years job stability (salaried)
- 3 years business stability (self-employed)
- Good credit score (750+ recommended)
- Valid property papers
Documents Required for Home Loans
For Salaried Applicants
- Aadhaar & PAN
- Salary slips (3 months)
- Bank statement (6 months)
- Form 16
- Property documents
For Self-Employed
- ITR 2–3 years
- Business proof
- GST number (optional)
- Bank statements
- KYC documents
How to Get the Lowest Home Loan Interest Rate
Here are powerful tips to secure the best rates:
✔️ Improve credit score above 750
✔️ Choose shorter loan tenure
✔️ Maintain low credit card usage
✔️ Apply with your salary account bank
✔️ Compare banks before applying
✔️ Apply during festivals (rates are lowest)
Following these steps can reduce your rate by 0.25% to 0.50%.
FAQs
1. Which bank gives the lowest home loan interest rate in 2025?
Kotak Bank and SBI currently offer the lowest interest rates, starting around 8.35%–8.40%. The actual rate depends on your credit score, income, and loan amount. Always compare before applying. Pre-approved offers can further reduce the rate.
2. What is the minimum credit score required for a home loan?
Most banks prefer a credit score of 750 or above. With a higher score, you get better interest rates and faster approval. Some banks approve loans with lower scores, but interest rates are usually higher. Improving your score increases loan eligibility.
3. Is fixed or floating interest rate better in 2025?
Floating interest rates are generally lower and more popular in 2025. They move based on RBI repo rate changes. Fixed rates remain constant but are usually higher. Floating is ideal for most borrowers unless you want stable EMIs every month.
4. How long does it take to get a home loan approved?
Banks usually take 3 to 7 working days for approval. Digital lenders like HDFC and IDFC give instant provisional approvals. Final disbursal depends on property verification. Complete documents help speed up the process.