If you are repaying a home loan or planning to take a home loan, here is a look at 10 banks offering the lowest home loan interest rates.
cheapest home loan
| Name of bank | rllr | Minimum interest rate (%)** | maximum interest rate |
| Central Bank Of India | 8.25 | 7.20 | 7.65 |
| bank of india | 8.25 | 7.80 | 9.50 |
| Bank Of Maharashtra | 8.20 | 7.80 | 9.20 |
| Union Bank of India | 8.20 | 7.90 | 9.60 |
| Punjab And Sind Bank | 8.00 | 7.90 | 11.20 |
| UCO Bank | 8.30 | 7.90 | 8.10 |
| Punjab National Bank | 7.90 | 7.95 | 8.75 |
| Bank Of Baroda | 7.95 | 7.95 | 9.30 |
| Karnataka Bank | 7.95 | 7.96 | 9.31 |
| Kotak Mahindra Bank | 7.99 | 7.99 | 8.50 |
Source: Interest rates as of September 8, 2022, compiled by ETIG
Do you get tax benefit on home loan?
As per Axis Bank FAQ on Home Loan “Yes, there are tax benefits to availing a home loan. The principal portion of your home loan EMI is eligible for deduction under Section 80C of the Income Tax Act, 1961, subject to a maximum limit of Rs 1.50 lakh.
If you are a “first time home buyer”, you can also claim an additional deduction of up to Rs 50,000 under section 80EE (Subject to certain conditions). This additional deduction can be availed for the interest portion after the first limit under section 24(b) is exhausted.
Section 24(b) of the Income Tax Act, 1961 allows deduction for the interest component of the home loan EMI. For self-occupied property, the deduction under section 24(b) is Rs 2.00 lakh per annum.
And if the house is let-out, i.e. it is a let-out property (LOP), then the actual interest payable is eligible for deduction under section 24(b), thus not subject to any ceiling.
Note, if you have taken a loan for the purpose of rebuilding, repairing or refurbishing the property, the deduction you are eligible for under section 24(b) will be limited to Rs 30,000, irrespective of where you live in it. Or rent it.”
How is the principal and due interest paid through EMI?
As per ICICI Bank FAQ on Home Loan, “Each EMI pays a portion of the principal (or amount borrowed) plus the outstanding interest on that principal. The ratio of each EMI to be used for repayment of principal and interest over time The first few EMIs contribute more towards the payment of interest and less towards the repayment of the principal, but the subsequent EMIs contribute more towards the repayment of the principal.
Banks and financial institutions generally calculate EMI using a simple mathematical formula. Hence, the EMI calculation and amortization schedule offered by various banks and NBFCs will generally be the same for the loan amount, tenure and rate of interest given. This also means that with the payment of each EMI, the pattern of reduction in principal payable generally follows a similar trend across all financial institutions.
Banks and financial institutions, in general, calculate EMI through a simple mathematical formula. Thus, for a given loan amount, tenure and interest rate, the EMI calculated and the amortization schedule offered by banks and non-banking financial companies (NBFCs) will generally be the same. This means that the pattern of reduction in principal amount by way of payment of each EMI will generally follow the same trend across all financial institutions.
It is a well-known fact that the initial EMI contributes more towards the payment of the interest payable than the principal amount. However, during the tenure of the loan, the subsequent EMIs contribute more towards the repayment of the principal amount as compared to the previous EMIs.”