Home loans: A look at lenders offering lowest interest rates

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Despite the impact of the Covid-19 pandemic, the home loan segment has witnessed a robust 9.6% YoY growth in the first three quarter of fiscal year 2020-21. Just after the second wave, many lenders slashed rates to lure prospective homebuyers. If you are planning to take a home loan, you must compare the deals offered by different banks, housing finance companies – based on parameters like interest rates, foreclosure charges, penalties, etc.

Besides one should know the processing fees, foreclosure charge, penalties, top up facility, etc, which he/she might  need during the tenure.

Here’s a list of top-9 banks or financial institutions offering home loans:

On July 31, SBI announced a 100% waiver on processing fees on home loans till August 31 for all eligible customers.

Options before you

NBFCs rates are fixed as per prime lending rate, which in turn gives the flexibility to negotiate with the lender for a higher sanctioned amount. On the other hand, banks work under the strict purview of the Reserve Bank of India and they offer home loan rates based on the external benchmark which in turn are governed by the policy changes.

NBFCs have comparatively relaxed policies and appeal to people who want to borrow a larger amount of people with low credit scores but they usually offer high-interest rates.

The market

The housing loan market in the country witnessed a robust year-on-year growth of 9.6% in terms of outstanding of loans till the third quarter of FY2021, despite the Covid-19 pandemic, says a report.

Total home loan portfolio outstanding stood at Rs 22.26 lakh crore as of December 2020, as compared to Rs 20.31 lakh crore as of December 2019, according to a report released by credit information bureau CRIF High Mark.

Affordable housing segment, ticket size up to Rs 35 lakh constituted 90% of the market by volume and nearly 60% by value as of December 2020.