On the numbers we hold, the public sector banks are cheapest. Canara Bank and Union Bank of India both advertise from 7.15%, level with LIC Housing Finance. HDFC Bank starts at 7.75% and Axis at 8.00%. But the headline rate is the smallest part of the decision. On a ₹50 lakh loan over 20 years, a 0.25% difference is worth about ₹1.7 lakh. The difference between a lender that passes on repo cuts within a quarter and one that does not is worth several times that.
| Lowest advertised home loan rate | 7.15 % p.a. |
|---|---|
| What it means | Floor rate — for applicants above ~750 CIBIL at low LTV |
| Lenders compared | 12 |
| RBI repo rate | 5.25% — Unchanged, August 2026 MPC |
| Max tenure seen | 32 years — Bajaj Housing Finance |
as of 5 September 2026 · Lender rate pages, checked individually
Home loan rates, lender by lender
| Lender | Rate p.a. | Processing fee | Max tenure | |
|---|---|---|---|---|
| Canara BankPublic sector bank | 7.20% – 10.25% | ₹20,000 | Upto 30 Years | |
| HDFC BankPrivate bank | 7.20% – 13.20% | ₹10,000 | Upto 30 Years | |
| PNB BankPublic sector bank | 7.20% – 9.10% | ₹20,000 | Upto 30 Years | |
| SBI BankPublic sector bank | 7.25% – 8.95% | ₹18,214 | Upto 30 Years | |
| Bajaj Housing FinanceHousing finance company | 7.30% – 10.80% | Upto 0.4% | Upto 32 Years | |
| IDBI BankPublic sector bank | 7.55% – 11.55% | ₹14,000 | Upto 30 Years | |
| ICICI BankPrivate bank | 7.65% – 9.80% | ₹10,000 | Upto 30 Years | |
| L&T FinanceNBFC | 7.65% – 18.00% | ₹10,000 | Upto 30 Years | |
| TATA HousingHousing finance company | 7.75% – 18.00% | ₹10,000 | Upto 30 Years | |
| Jio Housing FinanceHousing finance company | 8.20% – 18.00% | ₹10,000 | Upto 25 Years |
Updated 5 September 2026 · Lender rate pages, checked individually
Advertised rates are the floor, offered to salaried applicants with a credit score above 750–800 and a low loan-to-value ratio. Housing finance companies benchmark to an internal PLR rather than the repo rate, so their cuts pass through more slowly. Always compare the all-in cost: processing fee, legal and valuation charges, and any bundled insurance the lender attaches.
What to know
The structural difference nobody explains is the benchmark. Under RBI rules, banks must price floating retail loans off an external benchmark. In practice that is the repo rate. So a policy cut reaches your EMI within one reset cycle. Housing finance companies are not bound by that. They price off an internal reference rate instead. Historically that means cuts arrive slowly and rises arrive quickly. LIC Housing Finance and Bajaj Housing Finance look competitive on the advertised number. They are structurally worse on transmission, which is the real content of the fixed versus floating choice.
Judge the all-in cost, not the rate. A 0.35% processing fee on ₹50 lakh is ₹17,500. It is ₹20,650 once you add the 18% GST, which almost no comparison site includes — Bank of Baroda’s published schedule is a fair example of how the charges are set out. Then add legal and technical valuation charges, and CERSAI registration. The expensive one is loan protection insurance. Most lenders bundle it at sanction and present it as compulsory. It is not compulsory. A plain term policy for the same cover usually costs a fraction of a single-premium credit protect plan. And unlike the bundled version, it does not sit inside the loan accruing interest for twenty years.
The rate you are actually offered is set by your credit band. Lenders publish tiered grids. The gap between the top band and a 700-range score is routinely 50 to 100 basis points. On the same ₹50 lakh loan that is roughly ₹3 to ₹7 lakh over the full term — the EMI calculator will show you the monthly difference on your own amount. Check your score before you apply, not after. If it is under 750, moving it up is worth more than shopping for a lender.
Frequently asked questions
Which bank actually gives the lowest home loan rate?
On the rate cards we track, Canara Bank and Union Bank of India advertise the lowest floor among banks at 7.15% p.a., matched by LIC Housing Finance. That is the floor, not the offer: it applies to salaried applicants with a strong credit score and a low loan-to-value ratio. Your quote depends on your score band, income stability, employer category and the loan-to-value on the property.
Is a public sector bank or a private bank better for a home loan?
PSU banks generally price lower and pass repo cuts through predictably. Private banks are usually faster to sanction and better on service, and often win on convenience for self-employed applicants with complex income. Housing finance companies are the most flexible on eligibility but the least predictable on rate transmission, because they are not required to price off an external benchmark.
How much home loan can I get on my salary?
Most lenders cap total EMI obligations at 50–60% of net monthly income (the FOIR), and separately cap the loan at 75–90% of property value depending on ticket size. Both constraints apply, so the smaller one wins. Our home loan eligibility page works through both tests with the numbers each lender publishes.
Sources
- Reserve Bank of India — Monetary Policy Statement — policy repo rate (primary source) — as of 5 September 2026
- Reserve Bank of India — Master Circular — Housing Finance: loan-to-value ratios and risk weights (primary source)
- Lender published rate cards — Home, personal, vehicle and education loan rate cards — August 2026 — as of 5 September 2026
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