Buying a home is a big deal, and getting the right home loan can make all the difference. With so many banks offering home loans, it can be overwhelming to choose the best one. But don’t worry—we’ve got you covered! In this article, we’ll walk you through the 7 best banks for home loans in India in 2025.
However, before presenting the list, let’s talk about the Factors You Need to Consider Before Selecting the Ideal Bank for a Home Loan in India.
#1. Interest Rate
The interest rate is the key factor, as even a minor variation of 0.5% on large sums of money can lead to a significant impact.
#2. Processing Fees
Your bank will impose a set fee or a percentage of the loan amount as processing charges. The charge is solely for handling your application and does not ensure loan approval or disbursement. In most instances, fees for processing home loans are not refundable.
#3. Legal Fees
Few banks also impose Legal Fees to check and verify property documents. This fee is paid to the advocate to check the document and verify the title clearance of the property.
#4. Pre-closure Charges
Certain banks include a provision stating that you cannot pre-close your loan early or that you must pay an extra fee in the form of charges to do so.
#5. Loan-To-Value (LTV) Ratio
LTV shows the percentage of the property’s worth that the bank is willing to fund. Your bank might cover between 75% to 90% of the property’s worth.
#6. Part-Payment Rules
Numerous banks and housing finance companies (HFCs) impose strict regulations on partial payments to protect their interest earnings. Banks might also include a provision that restricts the amount or percentage of the loan eligible for prepayment.
#7. Insurance Cover
You can purchase insurance coverage for your home loan as well. Please be aware that purchasing insurance is optional, not required. Exercise caution if the bank pressures you into purchasing insurance.
In summary, you should take into account the following factors to determine which bank is most suitable for a home loan –
- Interest Rate
- Processing Fees
- Legal Fees
- Pre-closure Charges
- Loan-To-Value (LTV) Ratio
- Part-Payment Rule
- Insurance Cover
Best Banks for Home Loans in India 2025
HDFC Bank
HDFC Bank has been a trusted name in the home loan sector for decades. With competitive interest rates and flexible repayment options, it remains one of the best choices for homebuyers.
HDFC is recognized for its rigorous validation of property paperwork.
You can receive door-to-door consultation services with an HDFC loan specialist or effortlessly apply online and submit the documents.
HDFC offers competitive interest rates on home loans, which can be used for purchasing houses, acquiring plots, constructing homes, improving homes, and extending living spaces.
| Parameters | Loan Details |
| Floating Interest Rate | 8.70% – 9.55% |
| Processing Fees | 0.50% of the loan amount or Rs. 3300/- whichever is higher + applicable taxes / statutory levies. |
| Maximum Tenure | 30 years |
| Pre-payment | Nil for floating rate home loans |
| 2% in case of fixed-rate or combination rate loan | |
| LTV | 90% for loan value less than Rs. 30 lakhs |
| 80% for loan value 30 -75 lakhs | |
| 75% for loans above Rs. 75 lakhs | |
| Charges for delayed payment of EMI | 24% per annum |
Benefits
- Extremely clear fees
- Various choices available for loan repayment
Drawbacks
- HDFC imposes fees of up to Rs. 2,000 for loan re-evaluation
State Bank of India (SBI)
SBI is the largest public sector bank in India and offers some of the lowest interest rates on home loans. Its credibility and widespread branch network make it a reliable choice.
SBI implements some of the toughest property verification protocols throughout the loan procedure. The advantage is – you can be confident that the property documents are genuine and it’s likely you won’t encounter any legal issues later on.
The bank provides loans for buying homes, building houses, renovating homes, along with Top-up home loans.
SBI provides solely floating-rate loans and SBI Maxgain loans (home loans structured as overdrafts).
SBI home loan interest rates typically fall within a lower range when compared to other lenders.
Interest is applied on a daily decreasing balance, meaning the principal is reassessed at the end of each day and the interest is calculated accordingly. By making a partial payment today, the interest you pay on your loan decreases from the following day onward.
| Parameters | Loan Details |
| Fixed Interest Rate | None |
| Floating Interest Rate | 8.25% – 9.65% |
| Processing Fees | Flat Rs.2500 + GST |
| Maximum Tenure | 3 years to 30 years |
| Pre-closure Charges | Nil |
| LTV | Up to 90% |
| Part-Payment Charges | Nil |
Benefits
- Rigorous evaluation of assets
- Clear fees
- Computation of interest on the daily-declining balance
Drawbacks
- Slow Processing and Approval
ICICI Bank
ICICI Bank offers customized home loan solutions with minimal documentation and quick disbursal.
ICICI is recognized for its straightforward documentation procedure, fast approvals, and attractive interest rates. You can obtain loans for buying a house, constructing a home, renovating a residence, and also for top-up home loans.
ICICI provides home loans for properties valued at up to Rs.10 Crores with a maximum loan tenure of 30 years.
Interest is applied on a monthly reducing balance, meaning the principal amount is recalculated at the end of each month and the interest is applied accordingly. If you pay a portion today, the interest expense on your loan decreases beginning from the 1st of the following month.
ICICI offers a unique discount on the interest rate when the initial applicant for the home loan is a woman.
You are permitted to designate your non-working, female partner as the primary applicant to benefit from a reduced interest rate.
| Parameters | Loan Details |
| Interest Rate | 9% – 10.05% |
| Processing Fees | 0.50% – 2% of the loan amount or |
| Rs. 5,000/- whichever is lower | |
| Maximum Tenure | 30 years |
| Pre-payment Charges | Nil for floating rate loans |
| 2% for fixed-rate loans. | |
| LTV | up to 90% |
| Late-Payment Charges | 2% per month |
Benefits
- Can include a non-working female partner as a co-borrower and benefit from lower interest rates.
- Rapid loan processing.
- Doorstep services are provided at no additional charge.
Drawbacks
- Once raised, EMI cannot be lowered even if you have made sufficient part-payments.
Punjab National Bank (PNB)
PNB Housing Finance offers various home loan options, including Home Purchase Loans, Home Construction Loans, Home Extension Loans, Residential Plot Loans, and Home Improvement Loans.
PNB provides affordable home loans with government-backed subsidies under the Pradhan Mantri Awas Yojana (PMAY).
| Particulars | Loan details |
| Floating Interest Rate | Loan amount up to Rs. 30 lakhs – 8.30% to 9.85% |
| Loan amount greater than Rs. 30 lakhs – 8.15% to 9.60% (CIBIL Score Decide Rate of Interest) | |
| Processing Fees | 0.35% of the loan amount |
| Minimum- Rs. 2,500/ | |
| Maximum- Rs. 15,000/ | |
| Maximum Tenure | 30 years |
| Pre-payment Charges | Nil for floating rate loans |
| LTV | 90% for loan of less than Rs. 30 lakhs |
| 80% for loans of more than 30 lakhs and up to Rs. 75 lakhs | |
| 75% for loans of value more than Rs. 75 lakhs | |
| Late-Payment Charges | 2% per month |
Benefits
- If you obtain a loan for building a house, you may apply for an increase in the loan if construction expenses rise.
Drawbacks
- Delays in application processing
Axis Bank
Axis Bank offers a variety of home loan products, including loans with floating and fixed-interest rates, allowing a maximum repayment period of up to 30 years.
For one of their home loan options – Fast Forward Home Loans, Axis Bank provides up to 6-month EMI respite after completing 10 years of loan tenure and an additional 6 months after 15 years from the initial disbursement, given that the repayment history remains clear.
| Particulars | Loan details |
| Fixed Interest Rate | 14% for all cases. |
| Floating Interest Rate | 8.75% – 9.1% |
| Processing Fees | Higher of – 1% of the loan amount or Rs. 10,000+GST (As Applicable) |
| Maximum Tenure | 30 years |
| Pre-closure Charges | Nil for floating rate loans and |
| 2% for fixed-rate loans | |
| LTV | 90% for loan value less than Rs. 30 lakhs |
| 80% for loan value more than 30 lakhs to Rs. 75 lakhs | |
| 75% for loans above Rs. 75 lakhs. | |
| Penal interest rate | 2% per month |
Benefits
- Loans starting at Rs. 1 lakh
- Home loans with both fixed and floating rates
Drawbacks
- Charges fees for statement issuance, repricing, photocopying documents, retrieving documents, and issuing interest certificates
Bank of Baroda (BoB)
Bank of Baroda provides loans with highly competitive interest rates. You can obtain loans for purchasing a house, buying land, construction, enhancement, top-up, and renovations. You can obtain a loan approval (pre-approved home loan) prior to selecting the property.
Home Loan Advantage is a service that allows you to deposit your savings in a savings account associated with the loan account. The full sum in the savings account is considered as principal repaid, which decreases the interest expense.
| Particulars | Loan details |
| Fixed Interest Rate | Not offered |
| Floating Interest Rate | 8.15% – 10.35% |
| Processing Fees | ₹3,500.00 + GST (Per Property) |
| Maximum Tenure | 30 years |
| Pre-closure Charges | Nil |
| LTV | 90% for loan of less than Rs. 30 lakhs |
| 80% for loans of more than 30 lakhs and up to Rs. 75 lakhs | |
| 75% for loans of value more than Rs. 75 lakhs | |
| Part-Payment Charges | Nil |
Benefits
- You can take pleasure in a complimentary credit card and a discount of 0.25% on car loans. Bank of Baroda provides complimentary accident insurance with each home loan.
- You can access loans starting from Rs.2 lakhs.
Drawbacks
- Very Slow in terms of application processing.
Union Bank of India
Union Bank provides home loans at affordable interest rates with easy eligibility criteria. Union Bank provides loans for acquiring both old and new residential properties, buying land and construction, as well as renovations, but excludes Top-up loans.
| Particulars | Loan details |
| Fixed Interest Rate | Up to Rs. 30 lakhs – 11.40% |
| Rs. 30 to 50 lakh – 12.40% | |
| Rs. 50 lakh to Rs. 2 Crore – 12.65% | |
| Floating Interest Rate | Home Loan up to Rs. 30 lakh – 8.60% to 10.25% |
| Home Loan above Rs. 30 lakh – 8.60% to 10.45% | |
| Processing Fees | 0.50% of the loan amount. Maximum of Rs. 15,000 |
| Maximum Tenure | 30 years |
| Pre-closure Charges | Nil for floating rate loans |
| Nil for a fixed-rate loan if repaid from own sources | |
| 2% – if the loan is being refinanced | |
| LTV | 90% for loan value less than Rs. 30 lakhs |
| 80% for loan value more than 30 lakhs | |
| Part-Payment Charges | Nil |
Benefits
- Home loans are offered in both fixed and floating rates.
- Starting home loan interest rate at a low 8.60%
Drawbacks
- Additional loans cannot be obtained.
- Fixed rates are available for up to 5 years.
Tips for Home Loans
- You can include a woman (either your wife or mother) as a co-borrower to secure a loan at a reduced interest rate.
- Just because a bank has already approved a property, it doesn’t imply that you will avoid paying legal fees or property verification fees. Regardless of the approval status, all customers must pay these fees if the bank requests them. Therefore, consider carefully before obtaining a loan from a lender who has previously approved the project.
- Regardless of the loan-to-value ratio that banks assert they will fund, ultimately they will authorize the amount you qualify for based on your earnings. The lower value between your loan eligibility and the property’s LTV is approved.
- If you currently have any loans like a personal loan, student loan, or car loan, the approved amount for your home purchase will decrease.
- A strong CIBIL score over 800 provides a better advantage when negotiating for lower interest rates.
- Banks may always assess the property’s value to be lower than the price provided by the builder. During these instances, rely on the bank’s assessment and discuss terms again with the contractor.
Final Thoughts
Choosing the right bank for your home loan depends on your specific needs, whether it’s low-interest rates, flexible repayment options, or government subsidies. Public sector banks like SBI, PNB, and BoB offer affordability and trust, while private banks like HDFC and ICICI provide faster processing and customer-centric services. Take your time, compare interest rates, and pick the best bank that suits your financial goals!
FAQs
1. Which bank offers the lowest home loan interest rate in India in 2025?
SBI and Kotak Mahindra Bank currently offer some of the lowest home loan interest rates, starting from 8.40% per annum.
2. What is the maximum loan tenure for home loans in India?
Most banks offer a maximum loan tenure of up to 30 years, allowing borrowers to pay lower EMIs.
3. Can I transfer my existing home loan to another bank?
Yes! Most banks provide a home loan balance transfer facility, allowing you to shift your loan to another bank with a lower interest rate.
4. Do all banks charge prepayment penalties on home loans?
No, many banks like PNB, Union Bank, and SBI do not charge prepayment penalties on floating-rate home loans.
5. Are there any home loan schemes for women borrowers?
Yes, several banks, including HDFC, SBI, and Canara Bank, offer special discounts on home loan interest rates for women borrowers.
6. What is the processing fee for a home loan?
Processing fees vary but generally range from 0.25% to 1% of the loan amount.
7. Can I apply for a home loan online?
Yes, most banks offer online home loan application services for faster approval and disbursal.
8. What is the eligibility criteria for a home loan?
Eligibility depends on factors like income, credit score (750+ recommended), employment status, and age.
9. Does the government provide any subsidy on home loans?
Yes! Under the Pradhan Mantri Awas Yojana (PMAY), eligible borrowers can get interest subsidies.
10. Is a home loan tax-deductible?
Yes, you can claim tax deductions under Section 80C and Section 24(b) of the Income Tax Act for principal and interest payments.
Ready to buy your dream home? Compare these banks and choose wisely!