Buying a home is a dream for many, but high home loan interest rates can make it challenging. Fortunately, 2025 has brought good news for homebuyers in India, as several banks have slashed their interest rates, making home loans more affordable than ever before.
With the recent repo rate cut by the Reserve Bank of India (RBI), leading banks such as SBI, HDFC, ICICI, and Bank of Baroda have revised their home loan interest rates, offering borrowers a big relief. If you’re planning to buy a house this year, this guide will help you find the lowest home loan interest rates in India and understand how to secure the best deal.
Home Loan Interest Rates in 2025
| Feature | Details |
|---|---|
| Lowest Interest Rate | Starts from 8.10% per annum |
| Top Banks Offering Low Rates | Union Bank, SBI, HDFC, ICICI, Bank of Baroda, Canara Bank |
| Latest Repo Rate by RBI | 6.25% (as of March 2025) |
| Type of Interest Rate | Floating & Fixed |
| Loan Amount Range | ₹5 lakh – ₹10 crore |
| Loan Tenure | Up to 30 years |
| Eligibility Criteria | Minimum salary of ₹25,000/month, good credit score (700+), stable employment |
| Government Schemes Available | Pradhan Mantri Awas Yojana (PMAY), CLSS (Credit Linked Subsidy Scheme) |
| Official RBI Website | RBI.org.in |
The lowest home loan interest rates in India in 2025 have made buying a house more affordable. With rates starting from 8.10%, homebuyers have several great options to choose from. Make sure to compare rates, check your credit score, and use available government schemes to get the best deal.
If you’re planning to buy a home this year, act now to take advantage of these low interest rates before they change!
Why Are Home Loan Interest Rates Lower in 2025?
The RBI’s decision to cut the repo rate has led to a decrease in home loan rates across various banks. This reduction is meant to boost home ownership and make borrowing more affordable. Here’s why interest rates are lower this year:
- RBI Repo Rate Cut: A 25 basis points (bps) cut in the repo rate means banks now borrow money from the RBI at a lower cost, leading to cheaper home loans for consumers.
- Increased Competition Among Banks: As more banks compete for customers, they are offering lower interest rates and attractive loan terms.
- Government Initiatives for Affordable Housing: The government’s focus on schemes like Pradhan Mantri Awas Yojana (PMAY) is driving banks to offer better rates.
- Stable Economic Conditions: With inflation under control, banks can afford to lower interest rates without major risks.
List of Banks Offering the Lowest Home Loan Interest Rates in 2025
1. State Bank of India (SBI)
- Interest Rate: Starts from 8.25%
- Loan Amount: ₹5 lakh to ₹10 crore
- Processing Fee: 0.35% of the loan amount (minimum ₹2,000, maximum ₹10,000)
- Eligibility: Minimum salary of ₹25,000/month, credit score 700+
- Official Website
2. HDFC Bank
- Interest Rate: Starts from 8.20%
- Loan Tenure: Up to 30 years
- Processing Fee: 0.50% of the loan amount
- Eligibility: Minimum salary of ₹30,000/month, credit score 720+
- Official Website
3. ICICI Bank
- Interest Rate: 8.35% onwards
- Loan Amount: ₹5 lakh to ₹5 crore
- Special Offer: 50% discount on processing fees for women borrowers
- Eligibility: Minimum salary ₹30,000/month, credit score 700+
- Official Website
4. Bank of Baroda
- Interest Rate: Starts from 8.15%
- Loan Tenure: Up to 30 years
- Processing Fee: 0.25% of loan amount
- Eligibility: Minimum salary ₹25,000/month, credit score 680+
- Official Website
5. Union Bank of India
- Interest Rate: Lowest at 8.10%
- Processing Fee: ₹5,000 or 0.50% of loan amount
- Eligibility: Minimum salary ₹20,000/month, credit score 650+
- Official Website
Tips to Get the Best Home Loan in 2025
1. Improve Your Credit Score
- A credit score above 750 can get you the lowest rates.
- Pay off existing debts and avoid late payments.
2. Choose the Right Loan Tenure
- Shorter tenures reduce overall interest costs but increase EMI.
- Use a home loan EMI calculator before finalizing your tenure.
3. Compare Offers from Multiple Banks
- Don’t settle for the first offer—compare rates from at least three banks.
4. Check Processing Fees & Hidden Charges
- Some banks have zero processing fees during special offers—keep an eye out!
5. Consider a Balance Transfer for Existing Loans
- If another bank offers a lower interest rate, transfer your loan to save money.
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FAQs (Frequently Asked Questions)
Q1. Which bank is offering the lowest home loan interest rate in 2025?
Currently, Union Bank of India offers the lowest home loan interest rate at 8.10%.
Q2. How can I get a lower interest rate on my home loan?
To get the best rate:
- Maintain a credit score above 700
- Opt for shorter loan tenure
- Compare offers from multiple banks
- Look for special discounts for salaried professionals and women borrowers
Q3. Will home loan interest rates increase later in 2025?
While rates are low now, they can change based on RBI’s monetary policies and inflation trends.
Q4. Is a floating or fixed home loan better?
If you expect rates to drop further, go for floating rates. If you want stability in EMIs, choose fixed rates.
Q5. Can I switch my existing home loan to a lower rate?
Yes, you can apply for home loan balance transfer to a bank offering lower rates, but check the processing fees.
