2025 Home Loan Interest Rate Comparison: Top Banks Reviewed

Imagine you're planning to buy your dream home. Just this month, the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points to 6.25%, the first cut in nearly five years.

This move is set to make home loans more affordable. For instance, if you take a loan of ₹80 lakh over 20 years at an interest rate of 8.75%, your monthly EMI would be around ₹70,697. 

With the new rate of 8.50%, your EMI could drop to approximately ₹69,903, saving you about ₹794 each month. Over time, this adds up to savings, making homeownership more accessible for many Indians. 

Let's explore the best home loan interest rates offered by top banks in 2025, helping you make an informed decision on your journey to owning a home.

How to Choose the Best Home Loan Interest Rate in 2025

Buying a home is one of the biggest financial decisions you will ever make. A small difference in the home loan interest rate can save you lakhs of rupees over the loan term. But with so many banks offering different rates, how do you choose the best one?

Let’s break it down into simple steps:

1. Understand the Types of Home Loan Interest Rates

Before comparing rates, you need to know the two basic types:

• Fixed Interest Rate: The interest rate stays the same throughout your loan tenure. Your EMI will not change, even if market rates rise or fall.
• Floating Interest Rate: This rate changes depending on market conditions. If rates go down, your EMI will reduce, but if they rise, your payments will increase too.

Which is better?

If you want predictable payments, go for a fixed rate. If you can manage some risk and want to save when rates fall, choose a floating rate.

2. Compare Interest Rates from Different Banks

Not all banks offer the same interest rates. For example, as of January 2025, Union Bank of India and Bank of Maharashtra are offering the lowest rates starting from 8.35% p.a. However, popular banks like State Bank of India (SBI) and HDFC Bank also offer competitive rates with better service and accessibility.

State Bank of India (SBI) Home Loan Interest Rates

SBI is one of India’s most trusted banks for home loans. It offers both fixed and floating rates, making it flexible for different needs.

Interest Rate Range (as of January 2025):

• 8.50% p.a. to 9.85% p.a.

Example:

Let’s say you’re taking a loan of ₹50 lakh for 20 years. If your interest rate is 8.50% p.a., your EMI will be around ₹43,391. But if the rate increases to 9.85% p.a., your EMI would jump to ₹46,902. Over the loan period, this can mean a difference of nearly ₹8.4 lakh in total repayment!

SBI Special Offers:

• Women borrowers get a concession of 0.05% on interest rates.
• No prepayment penalty for floating-rate loans.
• Easy balance transfer if you’re switching from another bank for better rates.

Who should choose SBI?

If you’re looking for a bank with nationwide branches, reliable customer service, and special discounts for women or government employees, SBI is a great option.

HDFC Bank Home Loan Interest Rates

HDFC Bank is another leading name when it comes to home loans in India. It offers flexible repayment options, a quick application process, and competitive rates.

Interest Rate Range (as of January 2025):

• 8.75% p.a. to 9.95% p.a.

Example:

Assume you take a ₹40 lakh loan for 15 years.

• At 8.75% p.a., your EMI would be about ₹39,878.
• At 9.95% p.a., the EMI goes up to ₹42,499.

That’s a difference of ₹2,621 every month, or about ₹4.72 lakh over the full loan period.

Here’s a comparison of loan amounts and EMIs:

HDFC Special Benefits:

• Attractive offers for salaried professionals.
• Quick loan approvals with minimal paperwork.
• Dedicated relationship managers for high-value loans.

Who should choose HDFC?

If you want a smoother loan approval process and personal service, HDFC is a smart choice, especially for professionals working with top private companies.

Other Factors to Consider Before Choosing a Home Loan

It’s not just about interest rates. Here are a few more things to keep in mind:

• Loan Processing Fee: Some banks charge a fee of up to 0.50% of the loan amount.
• Prepayment Charges: Make sure your bank doesn’t charge extra for repaying the loan early.
• Loan Tenure: Longer tenures mean lower EMIs, but you’ll end up paying more in total interest.

Tips to Get the Best Home Loan Rate

• Improve Your Credit Score: Aim for a score of at least 750 to get the lowest rates.
• Opt for a Joint Loan: Applying with your spouse can help reduce interest rates and increase eligibility.
• Negotiate: Banks are often open to negotiation, especially if you have a good credit history.
• Compare Rates: Don’t just go with your primary bank—compare offers from at least three lenders.

3. ICICI Bank Home Loan Interest Rates

ICICI Bank is known for offering flexible home loan options with attractive features like lower processing fees, doorstep services, and quick approvals.

Interest Rate Range (as of January 2025):

• 8.75% p.a. to 12.05% p.a.

Example:

Suppose you take a loan of ₹60 lakh for 20 years:

• At 8.75% p.a., your EMI would be approximately ₹52,070.
• At 12.05% p.a., your EMI would increase to around ₹66,334.

That’s a huge difference of ₹14,264 per month! Over the entire loan tenure, this could mean paying over ₹34 lakh more in total interest.

ICICI Bank Features:

• Pre-approved loans for existing customers.
• Flexible prepayment options without extra charges.
• Balance transfer facility for borrowers looking for better interest rates.

Who should consider ICICI Bank?

If you are already an ICICI customer or are looking for a smooth loan approval process with digital services, ICICI Bank is an excellent choice.

4. Axis Bank Home Loan Interest Rates

Axis Bank is known for its flexible repayment tenures and attractive loan schemes for salaried professionals and self-employed individuals.

Interest Rate Range (as of January 2025):

• 8.70% p.a. to 11.90% p.a.

Example:

Imagine you are borrowing ₹40 lakh for 15 years:

• At 8.70% p.a., your EMI will be around ₹39,680.
• At 11.90% p.a., the EMI would jump to ₹46,765.

That’s a monthly difference of ₹7,085, which adds up to ₹12.75 lakh over the loan period.

Axis Bank Home Loan Features:

• Loans up to 90% of the property’s value.
• Special offers for salaried professionals from reputed firms.
• Part-payment facility with no additional charges.

Loan Amount and EMI Breakdown for Axis Bank

Here’s a quick look at various loan amounts and their EMIs:

Who should consider Axis Bank?

If you’re looking for customised loan solutions and higher loan amounts with flexible repayment options, Axis Bank is worth considering.

5. Punjab National Bank (PNB) Home Loan Interest Rates

Punjab National Bank (PNB), one of India’s largest public sector banks, offers competitive rates and government-linked subsidies for first-time homebuyers.

Interest Rate Range (as of January 2025):

• 8.50% p.a. to 11.45% p.a.

Example:

Let’s say you want a loan of ₹25 lakh for 20 years:

• At 8.50% p.a., your EMI would be around ₹21,700.
• At 11.45% p.a., your EMI will rise to approximately ₹26,500.

Over two decades, this difference can result in a total additional cost of over ₹11.5 lakh!

PNB Home Loan Features:

• Lower interest rates for women applicants by 0.05%.
• Subsidies under government schemes like PMAY (Pradhan Mantri Awas Yojana).
• No prepayment charges for floating-rate loans.

Who should consider PNB?

If you’re eligible for government subsidies or prefer a public-sector bank with better rural reach, PNB could be your best bet.

6. Bank of Baroda Home Loan Interest Rates

Bank of Baroda (BoB) is one of India’s most trusted public sector banks, offering competitive interest rates and special schemes for salaried individuals, women, and government employees.

Interest Rate Range (as of January 2025):

• 8.40% p.a. to 10.60% p.a.

Example:

Let’s assume you plan to take a ₹30 lakh home loan for 20 years:

• At 8.40% p.a., your EMI will be around ₹25,872.
• At 10.60% p.a., the EMI would increase to approximately ₹30,186.

That’s a difference of ₹4,314 every month, which adds up to nearly ₹10.3 lakh over the entire loan term.

Special Features of Bank of Baroda Home Loans:

• No prepayment charges for floating-rate loans.
• Special interest rate concessions for women applicants.
• Loan amounts up to 90% of the property’s value.
• Quick processing with digital applications available.

Who should consider Bank of Baroda?

If you are looking for low processing fees, flexible repayment options, and better offers for government employees or women borrowers, Bank of Baroda is a good option.

7. Kotak Mahindra Bank Home Loan Interest Rates

Kotak Mahindra Bank is known for providing quick loan disbursement, flexible repayment tenures, and customisable home loan offers for both salaried and self-employed individuals.

Interest Rate Range (as of January 2025):

• 8.70% p.a. to 10.75% p.a.

Example:

Imagine you take a ₹50 lakh loan for 15 years:

• At 8.70% p.a., your EMI would be about ₹49,592.
• At 10.75% p.a., the EMI would rise to ₹55,971.

That’s a difference of ₹6,379 per month, which adds up to ₹11.48 lakh over the loan term!

Loan Amount and EMI Breakdown for Kotak Mahindra Bank

Here’s a simple table to help you understand the EMI payments for various loan amounts:

Special Features of Kotak Mahindra Home Loans

• Customised repayment options based on income.
• Low processing fees for salaried professionals.
• Top-up loans available for existing home loan customers.
• Special offers for customers with high credit scores (750+).

Who should consider Kotak Mahindra Bank?

If you’re looking for a bank with flexible repayment terms and personalised customer service, Kotak Mahindra Bank is ideal—especially for self-employed individuals or those with variable incomes.

8. IDFC First Bank Home Loan Interest Rates

IDFC First Bank is one of the newer private sector banks in India but has quickly gained a reputation for offering attractive home loan interest rates, faster disbursal, and flexible tenure options.

Interest Rate Range (as of January 2025):

• 8.50% p.a. to 11.20% p.a.

Example:

Let’s say you apply for a ₹40 lakh loan over 20 years:

• At 8.50% p.a., your EMI would be approximately ₹34,720.
• At 11.20% p.a., your EMI would jump to ₹41,433.

That’s a difference of ₹6,713 every month, leading to total extra payments of over ₹16.1 lakh across the loan period.

Special Features of IDFC First Bank Home Loans:

• Loan up to ₹5 crores for eligible applicants.
• Pre-approved offers for existing customers.
• Digital application process for faster approvals.
• Balance transfer facility for switching loans from higher-interest banks.

Who should consider IDFC First Bank?

If you want fast processing, high loan eligibility, or are an existing IDFC First customer, this bank could be a convenient and cost-effective option for you.

How to Choose the Best Bank for Your Home Loan?

Before picking a home loan from Bank of Baroda, Kotak Mahindra Bank, or IDFC First Bank, consider these factors:

1. Compare Interest Rates: Even a 0.5% difference can mean saving lakhs over the loan tenure.
2. Loan Processing Time: Private banks usually have quicker processing times than public sector banks.
3. Loan Tenure: Opt for a shorter tenure if you can afford higher EMIs—it reduces the total interest paid.
4. Prepayment Flexibility: Choose a bank that allows part-payments without penalties.
5. Hidden Charges: Always check for processing fees, documentation charges, and pre-closure penalties.

9. LIC Housing Finance Loan Amount vs EMI Breakdown

Why Choose LIC Housing Finance?

• Lower rates for women borrowers.
• Easy balance transfer from other banks.
• Minimal paperwork with quick approvals.

If you’re looking for reliability and affordable rates, LIC Housing Finance is a solid option to help you buy your dream home.

Conclusion 

Choosing the best home loan interest rate in 2025 is about finding the right bank that suits your needs. If it’s the stability of SBI or the personal touch of HDFC Bank, make sure to compare offers, read the fine print, and plan your repayments wisely.

With smart planning and informed choices, you can save lakhs on your home loan and move one step closer to owning your dream home!

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LoansJagat Team

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