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Cheapest Home Loan Rates

Updated on Mar 03, 2013

I am listing down top 3 Home Loan providers in same order (Based on Interest Rate Criterion). I have collated this information based on Market Research conducted by me. For any clarification, you can leave your query in comments section below.

(a) Home Loans of upto 30 Lacs

1. 9.95%: State Bank of India (Cheapest in this Category)

2. 9.99% (upto 25 Lacs): Standard Chartered Bank

3. 10.15%: HDFC Ltd/India Bulls (Upto 25 Lacs)

* Please Note LIC Housing Finance provide discounted interest rate at the time of availing loan but this interest rate is applicable for fixed duration (upto 3 months) & after that interest rate increases.

(b) Home Loans between 30 Lacs to 75 Lacs

1. 10.10%: State Bank of India (Cheapest in this Category)

2. 10.20%: UCO Bank

3. 10.25%: IDBI/Bank of Maharashtra/Central Bank of India/Corporation Bank (Upto 50 lacs)/Union Bank of India/Punjab National Bank

(c) Home Loans above 75 Lacs

1. 10.10%: State bank of India (Cheapest in this Category)

2. 10.25%: Bank of Maharashtra (Upto 1 Cr)

3. 10.40%: Standard Chartered Bank/HDFC Ltd

Disclaimer: Home Loan Interest Rates are subject to change by Banks / Housing Finance Company / Home Loan Lenders. Interest rates mentioned above are based on Market Research. All the readers are requested to contact the Bank or Housing Finance Company or Home Loan lender to verify and re-check the Interest Rate offered. I do not undertake any liability or responsibility for any change in Interest Rates & any decision taken by reader’s based on information provided in this section.

Mohitsaxena007

It is really very Informatic, Shortly i am going to apply for Home loan ( Noida Extension)
Please suggest me bank (If possible )
as of now Two banks on my list ( Axis & HDFC ) Please suggest
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  You may go ahead with Axis. Also check if SBI is providing loan for ur project.
  
  Just to clarify HDFC bank does not provide any Home Loan. HDFC referred by you is HDFC Ltd and has nothing to do with HDFC Bank. Only link between 2 is common promoters. Many people misunderstand HDFC Ltd as HDFC Bank.
  - Shivamrai507
    
    mr mohit i am from hdfc ltd you may contact me for for your home loan in noida extn…………
    
    shivam rai
    noida
    09015461290
  - amit
    
    Hi Nitin i have applied for HDFC ltd home loan for 28 lakhs and they are offerinf 10.25% ROI (6.25 discount on PLR) .Please suggest shall i go ahead with this or apply to any other bank and in case yes please suggest the name also.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      Hi Amit, You may check out with SBI as they are offering loan under 30 lacs @ 10% interest rate. Secondly SBI’s Home Loan is linked to Base Rate.
      - http://www.facebook.com/sridevi.thimmappa Sridevi Thimmappa
        
        Hi Nitin,
        Are there any chances of reduction in Home Loan ROI in near days?.
        
        thanks,
        Sridevi Thimmappa
Satishk Nehra

Hi Nitin,

i am going to apply for home loan below 25 lakhs….can i go ahead with Standard Chartered?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  You may also check SBI. Also StanC is providing interest rate of 9.99% under promotional scheme. Kindly check the interest rates post promo period..If it remains same i.e. 9.99% then u can go ahead with StanC also
Monish Gupta

Hi Nitin,
i was confused by my broker that, SBI Home loan never give loan to Noida or Noida Extension property. Beacuse Noida and Noida Exten properperties are lease hold for 99 years. so the question he is right?

and nother question is, if he give me loan so how can i get it?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  For leasehold property u might face problem in getting a loan from SBI. Still u can give a try. Rather then dealing with broker, i request you to directly approach SBI for loan..It will also help u to know whether title of property is clear or not..If SBI approve loan then be assured your property title is clear.
Saikilllari

Hi Nitin,
I have taken ahome loan in LICHFL, initially the ROI is 10.4 with in6 months they increased to 11.65can i change my loan from LICHFL to stndchad or SBI.wether they will charge the same intrest or differ?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  As i have mentioned the same in my above post also. LICHFL is cheating customers by providing low interest rate under offer period & then revise the same.
  
  If your balance loan tenure is more than 10 years and you are getting a benefit of more than 2% in Interest rate then you can switch your loan to SBI. SBI does not adopt these kind of wrong practices.
Samirnare

Hi Nitin, Saraswat bank is offering home loans @ lowest ROI 9.9 as compared to SBI’s 10
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  0.1% does not make any difference as such. Its just a marketing gimmick. I will not recommend co-operative banks for Home Loan until unless PSU Bank’s refuse to process Home Loans. I will suggest SBI.
Mohansvp

Hi Nitin,

I took home loan from LICHF. The initial ROI was 8.25. After 3 months they changed. Currently its 11.65. Is it wise to switch to IDBI? Please suggest.

- Ram
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  I will suggest SBI
shivendra

I am Shivendra. I took home loan amounting to Rs. 12 lakhs from LICHFL for 18 years @ 10.70% at the rate of fixed interest rates for 3 years and my EMI comes to Rs. 12,563/-. May I switch my home loan to SBI and what will be EMI and period, if I switch my home loan to SBI. Further, there is a provision in Budget that there will be 1% rebate in interest rate for taking home loan up to Rs. 15 lakhs for the property of Rs. 25 lakhs. Does the LICHFL or SBI have such facility.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Both LICHFL and SBI provide 1% rebate in interest rate but it is available only for new loans. Pls mention your current outstanding, loan tenure and current interest rate then only i will be able to suggest on switching your home loan to SBI
  - Shivendra
    
    Thank you very much for quick response. I think it is the best forum where one can get precious advice on home loan matter.
    I took loan in November, 2011 and my total loan amount is Rs. 12 lakhs. My current outstanding loan amount is Rs. 11 lakhs. Loan tenure is for 18 years and current interest rate is @ fixed 10.70% for 03 years. Now, may I get your precious advice on switching my home loan to SBI; whether it will be beneficial to me and how much. Further please also tell me about pre-payment charges to be taken by LICHFL & processing fee, if any, to be taken by SBI.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      I have already answered this query.
http://www.nitinbhatia.in/ Nitin Bhatia

Currently SBI is offering 9.95% but it is imp to know your current Rate of Interest with HDFC before deciding.
Shivendra

Thank you very much for quick response. I think it is the best forum where one can get precious advice on home loan matter.
I took loan in November, 2011 and my total loan amount is Rs. 12 lakhs. My current outstanding loan amount is Rs. 11 lakhs. Loan tenure is for 18 years and current interest rate is @ fixed 10.70% for 03 years. Now, may I get your precious advice on switching my home loan to SBI; whether it will be beneficial to me and how much. Further please also tell me about pre-payment charges to be taken by LICHFL & processing fee, if any, to be taken by SBI.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  It is not beneficial for u to switch your home loan at this moment. LICHFL mention pre-payment charges in loan agreement, kindly check your loan agreement.
Manish Kamble

I am Manish, i took loan in April 2012 from LICHFL. My total loan amount is Rs. 11.40 Lakhs with interest rate of 10.40% after 3 month they have increase rate more than 11%. My property is on under construction for that reason i have received 60% amount of total Loan. can i switch my home loan to SBI.
- Manish Kamble
  
  Pls. suggest.
- Manish Kamble
  
  Can you please advice me?
  i have not received total amount of loan, my question is, Can i switch my loan before getting possession letter.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Loan should be fully disbursed to switch Home Loan. If your loan sanctioned is 100 Rs and you have availed 60 Rs then 1st you need to write a letter to LIC to reduce your loan amount from 100 Rs to 60 Rs. After this step your loan will be fully disbursed as per LIC & then you can shift your Home Loan to SBI.
  
  Just a caution, before doing this kindly check with SBI on your loan eligibility.
Rohit

Hi Nitin,
Rohit here. I have a current home loan with sbi which has gone to 12.7 floating after their 3 yrs fixed rate period ended. They have an option of changing over to 10.1 % floating (9.6 + 0.5) where as HSBC is offering 9.9 (9.75 + 0.24). sbi processing fee is 25k and hsbc is charging only 11k for the same. I perosnally trust SBI the most in their home loan schemes but as of now (due to the new RBI guidelines) both the bank have exactly the same scheme with their different rates. plus HSBC as a bank is very smooth n convenient for operation, where as SBI is more transparent. What do you suggest?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  I will prefer SBI.
Shivendra

Thank You Nitin for your advice.
Sat

Hello Nitin,
I have booked an apartment in pre-launch around a year ago, the builder saarth group post poned its launch thrice and now it says launch may happen in around 6 months. The reason being the area was under town planning, now came under Pune corporation limits due to which they are re-processing their documents and little more acquisition of land. (I can get my refund without cutting at any time). Now the rate in that area has increased around 1000 sq/ft then I had booked. Here my query is, should I continue to wait for the launch? (I am not in a hurry of possession).
Second thing, I had sanctioned my home loan from LICHF which got expired after 6 months. They are offering now 10.25% fixed for 3 years with 6 months validity, later floating. I have seen in the discussion over here that ROI changes after 3 months for LIC. Is LICHF really providing 3 years fix ROI? Me too prefer SBI but their validity is 3 months only and I have been postponing my car loan of 6 lacs for 7years so that it doesnt affect my home loan.
My plan is home loan 27 lacs for 25 years, car loan 6 lacs for 7 years from SBI, my take home is arnd 61k per month. Offcourse car loan is not priority. But does my package allow me to go for car loan first?
And SBI is providing home loan for 10.25% for 25 years.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Hi, To answer your queries
  
  1. In this case, re-processing of existing documents is not required but only additional documents are required if the plot of land is now within Pune Corporation limit. I request you to hire a local property lawyer and get all documents verified that is what exactly builder is doing or meant by re-processing of documents. If you get clearance from local lawyer then you should wait.
  
  2. Discussion here is on floating home loan. In case of 3 year fixed scheme, interest rate will not change for 3 years but still the LICHFL has option to revise interest rate even in case of fixed interest rate (Very rare scenario). Fixed Interest Rates are not truly fixed.
  
  3. First you avail home loan then car loan. Car loan is un-secured loan and will impact CIBIL score therefore if u avail car loan 1st then it might impact prospect of Home Loan whereas other round is beneficial for you becoz Home Loan is secured loan.
  
  Its a good option to negotiate package deal of Home Loan + Car Loan. Lastly validity of Pre-approved home loans can be increased if need arises. Just discuss this with SBI and if they agree then u may opt for SBI
KD

hello nitin, i have booked the flat in noida ext. and looking for home loan. the project is approved by 3-4 banks. out of them, im looking for hdfc or bank of maharshtra. for which shall i go for? is there are any hidden charges other than processing fees?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  I will suggest HDFC out of 2 options shared by you. In HDFC only hidden fees besides processing fees is stamp duty to be paid for registration of mortgage agreement, which they will not tell in advance.
harish

Hi iam harish , i took home loan from lichfl an amt of rs 18lacs last jun, the roi is 10.7% and my emi is 18236/- , i am planning to switch the loan to sbi can u pl.suggest me a good advice regarding this..
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Hi Harish,
  
  I will not recommend you to switch your home loan as of now. You will not gain financially considering cost involved in switching Home Loan. Tks
abhishek

Hi Nitin, I need a loan of 24lakh to buy a property worth 30L.The issue is that i get 40k inhand after all deduction. I wanted to go with SBI but it doesn’t provide the loan amount mire than 20L. So thinking of going with HDFC. But got confused as people suggested to go with banks which follows base rate system. Pls suggest me which bank to follow.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  If your loan requirement is higher then loan offered by SBI then u may go for HDFC. If u can arrange additional funds on your own then SBI is best option.
Shriniwas D Patil

as axis bank is giving home loan on new interest rates, but existing home loan customers are not getting the benefit of cutting home loan interest rates in february by RBI. Kindly advise me to deal wit AXIS bank…
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  You may pay conversion fees which is normally 0.5% of outstanding loan amount and move to lower interest rate.
raju valaovoju

hi nithin this is raju i have taken 12 lakhs from lic hfl at roi 10.8 fixed for 20 years
my emi now Rs 12,340. to day i did that my emi incresed to 15000 then loan tenure decreased to 7 years what i did is correct?
because i want to finish loan early.
my emi started from 2012 march
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Its a right approach to finish loan as fast a u can…
  - raju valavoju
    
    Thank You Nitin for your advice
Sk Mudia

Hi, Nitin,

I h taken a home loan of 35 lakhs from Dena Niwas Home-Dena Bank @ of 12% fixed in 2011. 2011 was the year of teaser loan;

now i want to switch / transfer my loan to lower interest rate floating scheme.

I got a offer from axis bank @ 10.5 % floating;

before taking any decision on it i want few questions to be answered,

1- Is floating rate is better than fixed interest rate loan ?

2- is shifting from Fixed to Floating rate possible within the bank / financial institution ?

3- if yes can i negotiate on the rate of interest offered to me by Dena bank?

4- Floating Rate of interest can crossed 12 % in near future (in 2 – 3 years). Explain the logic of rise and fall behind rate of interest (floating / fixed) .

Please help in saving some bucks. Thank in advance.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Hi,
  
  Pls find my inputs
  
  1. Not necessary, in declining interest regime floating rate is better whereas when interest rates are increasing then fixed interest rates are better…To be on safer side, you may opt for 50% loan on fixed interest and rest 50% on floating
  
  2. Yes, its possible but they may charge some fees for conversion
  
  3. Just find out interest rate offered to new customers. Dena Bank will not reduce interest rates below that & will match it with current interest rates. You may get better deal with SBI as their interest rates are lowest as of now.
  
  4. Unfortunately, no one can predict interest rate movement as it all depends on current economic conditions in country i.e. demand, supply, inflation etc. From current levels interest rates will only fall in near future. Possibility of increase is almost negligible.
  
  Hope i answered ur queries.
  - sk mudia
    
    Hi Nitin,
    
    Thanks for the quick reply.
    
    After getting your inputs,Yesterday i had gone to dena bank to discuss that in detail.
    
    here i am putting key points of my discussion with Asst. Manager (Dena bank – retail asset branch) for your kind review. please go through with the points.
    
    Points:-
    
    1. As per bank rules Fixed interest Loan will be reset after 3 years. After every 3 years bank will review and decide rate of interest for next 3 years, and so on.
    
    2. Dena bank has a provision to change loan interest rate from Fixed to Floating. but bank will charge 1% of total outstanding amount as a fee to avail this service. Which will be approx 35k in my case.
    
    2. Current rate of Interest – floating for new loan is 10.55 % (for amount above 30 lakh, repayable in 20 years). Bank offered me the same (10.55%) to switch my loan from fixed to floating.
    
    4. Bank asked me to pay -INR 7182/- + Interest for my Flat insurance, which is mandatory for each home loan taker as per bank which will secure my flat against natural calamities (earth quick, fire, flood etc,),
    when i have asked for a proof of “flat insurance” and why hasn’t this been informed earlier? On this asst.manager showed a yearly statement of my home loan account which had a entry in statement stating that “Premium of United India Insurance”. now i have to pay that amount too with penalty interest.
    
    on my second question – why bank didn’t informed me about such charges earlier on this mr. manager told that its been understood and written in papers, bank does not inform customer separately about flat insurance, he took my email id for sending half yearly statements on email.
    
    5. conclusion of our meeting : I have been offered to switch from fixed to floating ROI with fee of 35k approx, in addition to that i have to pay 10k for my flat insurance.
    
    Please suggest whether i accept the offer made by dena bank or transfer my entire loan to other bank ( SBI or Axis),
    
    also explain the loan transfer process with the list of documents required.
  - Sk Mudia
    
    Hi Nitin,
    
    Thanks for the quick reply.
    
    After getting your inputs,Yesterday i had gone to dena bank to discuss that in detail.
    
    here i am putting key points of my discussion with Asst. Manager (Dena bank – retail asset branch) for your kind review. please go through with the points.
    
    Points:-
    
    1. As per bank rules Fixed interest Loan will be reset after 3 years. After every 3 years bank will review and decide rate of interest for next 3 years, and so on.
    
    2. Dena bank has a provision to change loan interest rate from Fixed to Floating. but bank will charge 1% of total outstanding amount as a fee to avail this service. Which will be approx 35k in my case.
    
    2. Current rate of Interest – floating for new loan is 10.55 % (for amount above 30 lakh, repayable in 20 years). Bank offered me the same (10.55%) to switch my loan from fixed to floating.
    
    4. Bank asked me to pay -INR 7182/- + Interest for my Flat insurance, which is mandatory for each home loan taker as per bank which will secure my flat against natural calamities (earth quick, fire, flood etc,),
    when i have asked for a proof of “flat insurance” and why hasn’t this been informed earlier? On this asst.manager showed a yearly statement of my home loan account which had a entry in statement stating that “Premium of United India Insurance”. now i have to pay that amount too with penalty interest.
    
    on my second question – why bank didn’t informed me about such charges earlier on this mr. manager told that its been understood and written in papers, bank does not inform customer separately about flat insurance, he took my email id for sending half yearly statements on email.
    
    5. conclusion of our meeting : I have been offered to switch from fixed to floating ROI with fee of 35k approx, in addition to that i have to pay 10k for my flat insurance.
    
    Please suggest whether i accept the offer made by dena bank or transfer my entire loan to other bank ( SBI or Axis),
    
    also explain the loan transfer process with the list of documents required.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      Its better to transfer your Home loan..Also check with Dena Bank on pre-closure charges (3rd party funding)…For transfer, I will suggest SBI but just a caution, the SBI process is bit tedious else you may go for Axis
      
      You should ask Dena Bank to share the letter with you containing list of original documents submitted by you to avail home loan and then you can approach SBI or axis for home loan transfer…Other documents required for transfer are same as required for new home loan like salary slips, PAN etc.
http://www.facebook.com/pramod.sahu.73 Pramod Sahu

Hi Nitin,
I am planning to buy a flat of worth 30 lakhs, of which i will be taking a loan of 23 lakhs. My builder is giving provision for getting the loan from LIC HFL, HDFC and Axis Bank.
I have checked that both HDFC and LICHFL are housing finance companies which work under BPLR system where as Axis Bank works under Base rate being a pure bank governed under RBI.
Please suggest where from should I go for getting the loan.
Regards
Pramod
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Out of 3 lenders shortlisted, i will suggest Axis bank
Mahesh

Hi Nitin, I am planning to buy a flat which is in Bangalore which is valued at 47 lakhs. The registration and stamp duty cost will be an additional 2.5 lakhs. I wish to finance it to the maximum by home loan and will take a Personal loan for the balance. Can you let me know which is the best option apart from SBI. Is LIC HFL a good option
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  I will not recommend LIC HFL. You may check with Axis Bank.
Lalit

Hi Nitin,
I have applied for a home loan of 25 lacs from LIC housing finance. The tenure of the loan is 15 years (180 months) but withine this 10 years is for fixed rate of interest that is arround 10.95% (Fixed for initial 10 years). After that the last 5 years would be foalting rate of interest (interest rate would be applicable with the Rate which will be aplicable at that time.).
Kindly suggest if I am liable to pay any extra charges? Also, they have mentioned some thing called Commitment charges. I have no clue as what exactly is that?

Lalit.
lalitbjha@gmail.com
9705492650.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  I request you to check your Home Loan Agreement for same. If you can send me the exact clauses from Home Loan Agreement then i will be able to explain you better.
  - Lalit
    
    They have sent me a sanction letter which goes like this…
    
    1. Scheme : Griha Prakash
    
    2. Loan Amount : 25,00, 000 (Twenty Five Lakh)
    
    3. Rate of Interest Type: PURE FIXED
    
    4. Current LHPLR : 14.40%
    
    5. Fixed Rate for 1 – 120 months at 10.95%
    
    6. Floating Rate 121 – 180 months at the floating rate of interest linked to then prevailing LHPLR (Subject to periodic review)
    
    7. Term : 180 Months
    
    8. Purpose: Purchase of new Flat.
    
    9. Repayment Terms: Equated monthly installment.
    
    I have explained the details of the sanction letter. Kindly share you views on the same.
    
    Regards,
    Lalit.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      There is no mention of commitment charges in details shared by u. They have also not mentioned the spread to be applicable on floating rate after 10 years..Pls request them to mention the spread in sanction letter.
chandrasekhar

Hi Nitin,
You are doing a nice work in guiding people like us regarding our first/big investments.
I am seriously stuck in a problem.
I made an agreement of sale for a flat in 5th floor in hyderabad, which is under construction(3rd floor complete). The project is approved by both LICHFL & HDFC.
As i am taking the flat on my wife’s name, i would be eligible for 10% ROI with LIC, where as it is 10.15 with HDFC.
As you might be aware the market prices are shooting up in hyderabad from April 1st. Registration charges will increase upto 80%. LIC is insisting us to wait till 5th floor slab is completed for loan disbursement without which Registration cannot be completed. If i wait for 2 months for slab to be completed, I would end up paying 80000 extra for registration, whereas HDFC promised to get the registration done prior to 1st April.

Please suggest.

Regards
Chandrasekhar P
+919848002189
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  LIC is telling you right and HDFC is giving you false promise…Firstly registration cannot be completed for non existent property. If 5th floor is not constructed then you cannot register your property without completion. Secondly, Registration will be done by builder not by HDFC, Builder himself will not go for property registration without construction being completed.
Query

Hi, I am applying for home loan with LICHFL. What the agent says is, since I am single, will get 75% of the agreement value. Did not find anything like this on their site. Does anyone has any idea on this? Also, they say that interest is fixed for 2 yrs. But I see, you say it changes after 3 months. Is this correct one?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Loan amount can be upto 80% of agreement value. It also depend on eligibility based on income and repayment ability. Probability is that your loan eligibility is only 75% of agreement value. Pls cross check with agent on same.
  
  Floating interest rates change after initial 3 months as shared by many readers on this forum. If interest is fixed for 2 years (to be mentioned in loan agreement) then it will not change but you need to check what will be interest rate after 2 years i.e. assume if 2 years expiring today then what will be rate of interest.
  - Query
    
    Hi, Thanks for your reply. I am told that as I am unmarried, so loan amnt is 75% of agreement value. This is something they calculate under repayment ability.
    
    Interest rate is fixed for initial 2 yrs and then floating depending on the prevailing rate at that time. From other posts its confusing to understand whether ppl are talking abt rate change after 3 mnths when the fixed tenure ends or right from the start of EMI.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      Till fixed tenure i.e. 2 years your ROI will not change. Interest rate change after 3 months in Floating rate Home Loans.
      - Query
        
        hi, Thanks. If it is fixed for the initial 2 yrs tenure and then changes in floating period, then please update this information on the page accordingly .
        
        Also, another query is that-
        1.When loan EMI tenure starts? from the date of sanction or from the date of first disbursement?
        2.What is the BPI?
        
        http://www.nitinbhatia.in/ Nitin Bhatia
        
        I could not understand your 1st para regarding fixed and floating..To answer other queries
        
        1. From Date of Disbursement
        2. Pls share full form
balaji k

Hi Nitin,

It is an excellent social service! Iam a central govt. employee and I already has home loan at LICHFL for Rs 23,75,000 for 20yrs tenure, with an EMI of Rs23582/- was taken in June 2012 (with PLR of 14.40%). Three months later My interest rate has been changed from 10.4 to 11.9 with Rs2000 increase in EMI. Then I understood that I was given very less spread(discount) of 250 rather 400. Now I am planning to switch over, but all the public sector banks are insisting for LRS.

I got a news of getting offer from Federal Bank(Private) with 10.20%(equal to BaseRate). And also vijaya(Public sector ) bank offering at 10.50% for 20yrs tenure. Both are giving pre-processing fee waive off till 31st March 13. Please help me in compare and contrasting the offers and which one suits me best?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  You have not mentioned the Base rate and Mark up offered by these bank then only i will be able to suggest better. Prime Facie, i will suggest Vijaya Bank.
  - balaji k
    
    Federal Bank : Base Rate 10.20, floating rate: 10.20
    Vijaya Bank: Base Rate 10.20, floating rate: 10.50
    ThankYou Nitin
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      My suggestion, Federal Bank
Pratibha

hi Nitin,

is LIC HF bhagya lakshmi scheme better ? or India bulls is better ?
- Ravi
  
  Hi Prathibha,
  Don’t take loan from LICHFL. They are cheating people with lower ROI initially. My ROI was increased from 8.9 to 11.9 after 3 yrs.
  - Manoj
    
    Yes LICHFL are a cheater. Initially they offered me loan @10% floating. After 3 months it was raised to 11.9%. I am also going to switchover to other bank….
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  I will not suggest LIC. You may go for SBI.
  - Pratibha
    
    Thanks Nitin and Ravi. Only factor for which I am inclined to LIC is that other flats in my building already got loan from LIC and I wanted to finish processing within this month. I heard that from next month registration cost is going to increase by 20 percent.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      As u not mentioned your city so can’t comment on registration cost but it seems registration cost is increasing in Hyderabad from next month.
      - Pratibha
        
        yes, I am thinking to switch my loan to SBI after 2 years when it becomes floating.
Sachin

Hi Nitin,

This is Sachin. I have taken Home Loan of 39L in July 2011 from HDFC. Current Interest rate is 11% and current principle may be around 37.5L. I am weighing on either to go for conversion in HDFC only or Balance Transfer to SBi.

HDFC is offering 10.40% ROI after payment of Rs. 10500 as conversion fee. SBI rate will be 10.10%. Current tenure with HDFC is 171 Months and will be reduced to 159 after conversion.

I had discussion with one of the Agent who deals in SBI loans, he said the conversion cost will be around 20000.

Please advise which is the better option considering switching over costs.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Its better to pay conversion fees to HDFC and lower your ROI.
dvsquare

Hi,
Thanks for the valuable post.
I have taken a loan from SBI of 60L (ROI was 10.75% that time, not sure how much right now), for a under construction house in Bangalore. I have got the construction agreement done in my name as well I am the only borrower for the loan.
This was arund 1.5 years back. Now, last year I got married, and I wanted to include my wife (working) as co-borrower, but SBI says, its not possible now. Secondly, I wanted to include my wife’s name in the registration, but SBI says, even that is not possible as per their rules/legal stuff.
So, I am thinking of switching my home loan to other banks (mostly LIC-HF), as they can take-over the loan and me and my wife both can be co-borrowers, also also be the co-owners at the time of registration.
The ROI told to me is 10.25% fixed for 2 years and then floating after that.
Please suggest.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  SBI is right, Once the loan is processed you cannot add co-borrower or co-owner. Legally if the Agreement to Build and Agreement to Sell is in your name then registration will happen only in your name. After registration, you can gift 50% share in your property to your wife through Gift Deed (Post clearing your loan with SBI)
  
  Even if registration is only in your name, you can still add your wife as co-borrower in home loan but for that you need to switch your home loan from SBI to some other lender.
  
  I will not recommend LIC HFL. Also registration will be done by builder not by LIC so they are giving your false info to add your wife as co-owner for registration.
  - dvsquare
    
    Hi Nitin,
    Thanks again for the detailed reply for my query.
    SBI is right and I understand that, and I am trying to find a way to still get it done, if can be through switching the loan.
    I have inquired through one person (not directly LIC employee, but I think agent, I got his num from my builder), and he told that its possible, LIC can takeover from SBI, and my wife can be co-borrower. Secondly they will allow the registration in both me and wife’s name.
    Ok, so you are saying that even if my wife can’t be co-owner, but can be co-borrower when we switch loan?
    
    I have heard that LIC being the govt body is better after SBI. And they can give me 10.25% for 2 years fixed and then if its not good after that, I can switch back to SBI again. My main purpose right now is ownership and borrowership change. Still, you feel, LIC-HF not good?
    
    I know, registration is done by builder, and they are ready to include my wife’s name, but SBI was saying that they won’t allow it, hence the issue.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      Two points from my end
      1. LICHFL is not a Govt body, LIC is majority stakeholder therefore it is LICHFL. The experience of my readers is not good with LIC, you may through comments posted on this forum. I will not recommend LICHFL
      
      2. If you wish your wife to be co-owner then besides switching loan, you also need to change the entire legal documentation between you and builder i.e. you need to include your wife’s name everywhere otherwise you will find it very difficult to sell your flat in future.
      
      Only solution for you is to re-do entire documentation with builder and switch home loan. Secondly, you need to close the 1st before you initiate fresh documentation with builder and then you can apply for fresh loan.
      - dvsquare
        
        Nitin,
        Right now, we have only 1 agreement (construction) agreement with builder and that will need to be changed. Registration (sale deed) will include both of our names, as it not done yet.
        Apart from talking the LIC-HF agent (executive), I had a talk to AGM also, and he told, its possible. The only clause is that they will issue 2 cheques at the time of take-over, one will go to the bank for take-over and other will go to builder for registration, and registration should happen at the same date. This all seems to be possible from my side, and hence I have agreed to meet for personal discussion about my case (step before loan sanction) this saturday morning with the AGM, Rajajinagar, bangalore.
        I will get 10% ROI (my wife will be first applicant) fixed for 2 years under “Bhagyalakhsmi” scheme.
        But atleast, I will get solution to my problem – To include my wife in ownership as well as making her co-borrower. That’s why I was going after LIC-HF.
        
        Apart from the above discussion, I wanted to ask another clarification about tax benefits as I got confused when I have been talking to few people including SBI loan officer.
        Here is my understanding for joint loan
        (1) Me and my wife both will be able to claim 1.5 L separately (total 3L) for Home loan interest every FY.
        (2) Me and my wife both will be able to claim exemption under 80C (1+1 = 2 L) for principal repaid.
        Above stuff correct?
        
        http://www.nitinbhatia.in/ Nitin Bhatia
        
        Your understanding on Income tax benefits is correct provided house is self-occupied. In case house is on rent then you can’t claim principal exemption u/s 80C but then there is no limit on interest deduction, it will be in ratio of ownership.
        
        dvsquare
        
        Thanks.
        I am thinking of going ahead of LIC-HFL, at 10% fixed rate of interest under “Bhagyalakshmi” scheme, and then after 2 years I will move to SBI back or some other good bank. For now, atleast the basic problem where I want to include my wife as co-owner and co-borrower can be solved.
Sanchit

Hello Nitin,

I’m purchasing a flat in Pune. I’m getting home loan of Rs. 44.60 Lakhs from LICHFL. I did the agreement of sale last week. My LIC agent saw the agreement of sale, and pointed out that my wife’s name should be printed first and after her name, my name must be printed. else ROI will be charged 10.20% instead of 10.15%. Now I have to file correction in Agreement of Sale, which will cost be another 7000 bucks. I’m not sure LIC has any such clause of naming order of wife and husband in Agreement of sale. Any thoughts on that?

Thanks,
Sanchit
- Sanchit
  
  sorry.. its 10.0% instead of 10.15%
  - http://www.nitinbhatia.in/ Nitin Bhatia
    
    Just to check, have u mentioned % share of holding in property between you and your wife in Sale Agreement…If it is not mentioned then its by default equal share. Secondly, loan is taken by your wife only or both of u are co-borrower.
    
    There is no such rule as such but banks usually prefer primary borrower’s name First on agreement & then Secondary Borrower. Usually Primary Borrower is person with higher eligibility.
    
    Besides above mentioned conditions, there is no such rule to mention borrowers in particular order.
  - dvsquare
    
    Hi Sanchit,
    It seems that you have been offered loan from LIC-HF under the “Bhagyalakshmi” scheme, and hence 10% ROI, and for which your wife (female) should be first applicant.
Ashok

Hi Nitin
Initially would like to appreciate and thank your valuable support and guidance.
Am Ashok, from chennai. As of now, am in situation to have a housing loan from LIC(which am offered with) for 20 L, And from here coming across queries & comments, got an idea what can be done with, Further, i would be pleased if i could get details on Floating rate interest variations for last 5 to 10 years. so that i could make better decision.
Thank you
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Dear Ashok,
  
  Currently the data requested by you is not available in public domain & vary for each lender. Request you to approach the HFC or Bank for same.
  
  Thanks & BR
shiv kumar

hi nitin, i am planning to apply for home loan for 7 lakhs (for 5 years term only) at LIC HFL at the rate of 10.7% which will be fixed for 3 years and then floating rate of interest prevailing at that time will be applied.
is this a good choice or suggest me other options
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  As u might have checked the feedback on LIC in this forum…I will not suggest LIC…You may check with SBI
- Saravanan J
  
  I enquired an LIC agent on 3rd April, he says 10.25 fixed for 2 years and then floating or 10.95% fixed for 10 years and then floating
  - http://www.nitinbhatia.in/ Nitin Bhatia
    
    Different branches of HFC offer interest rates at different rates depending on their targets and market situation
anshu

I have taken loan of 26 lakhs from lichfl in 2012. I want to switch the loan.please suggest the bank. Sbi people are making troubles
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  You may check with Axis Bank
Rajesh

Hi Nitin,
Please advise hoe good is home loan from Central Bank of India?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  You may go ahead with Central Bank of India
Bala

I’m planning for home loan of 25L (15 years Tenures) for house construction, Please suggest between prevailing SBI floating 9.95 vs LICHFL 10.95 fixed rate for 10 years.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  SBI
Amit Rawal

Please suggest which is better in today’s scenario – HDFC floating home Loan @ 10.30 % for 20 Years- 4500000 or LIC Bhagyalakshmi scheme which give 10% fixed for 2yrs and remaining floating as per prevailing rates for 20 yrs – 4500000
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Out of LIC and HDFC, HDFC is better
- Nitin
  
  loans
- Nitin
  
  We offer Home Loan @10% for 20-25 years -4500000 from Co-Operative Bank
  In this case for Rs. 45,00,000 your emi will be Rs. 45,892 @ 10% Rate of Interest
  For further query.
  Call the below no. 835600331
Jin

Hi,
I want to take a loan of 30 lakh for a house in ahmedabad but today i read the news that additional tax exemption of 1 lac is being provided to loan upto 25 lakh. So know i think i should go for a loan of 25 lakh instead of 30 lakh so that i can get this benefit. Please suggest
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Request you to go through following article to know the impact of budget…For availing this benefit you need to wait till 1st June
  
  http://www.nitinbhatia.in/real-estate/impact-of-budget-on-real-estate/
Jin

Hi,

I want to take a loan of 25 lakh and i am confused between LIC housing finanace and SBI. SBI is charging compulsory moartage charge of around 7500 Rs. and complusory house insurance of around Rs. 18000. Where as there is no such charge in LIC housing loan. LIC is offering me 10.25% fixed rate of interest for 2 years and then floating which turns out to be benificial as compared to SBI’s ROI. Please suggest what should i opt for? Request your urgent reply as i need to finalise the loan by tomorrow.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  House Insurance is not compulsory and its ur choice…LIC will also charge Mortgage charges though they are not disclosing now, Pls clarify with LIC… Interest rates will fell in future therefore i suggest SBI.
- Lalit
  
  NEVER For LIC..you will repent if you take any loan from LIC..Please go for SBI
Satish

Hi Nitin,
Your articles are very informative
I have an existing balance home loan of Rs.19 Lac (Loan amt Rs 23 Lac – Aug 2011) @ 10.75% pa – Variable interest from HDFC Ltd Mumbai – . Recently wef March 2013 the rate was reduced to 10.65% pa , with no charges. However , when contacted with branch they offered the rate of 10.15% pa if I pay conversion charges of Rs. 5K.
Query –
1. The difference in rate of interest is good, but is the bank justified in demanding the conversion charges , when my Loan is under the Variable Rate of Interest.
2. Should I switch my loan to SBI with rate of Interest @9.95%?
3. Any cost leviable by HDFC Ltd and SBI for such switch from HDFC to SBI
Please guide
Regards
Satish
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  1. Yes, they can demand, its mentioned in Home Loan Agreement and agreement is signed by u
  2. Not now, wait for interest to reduce further..When rate differential is 1.5% then only its financially beneficial
  3. HDFC will levy penalty as you will be closing loan though 3rd party sourcing. SBI will levy processing (normally 20k) and mortgage charges (depending on property value)
  - dilip
    
    SBI ask for 0.25% of loan amt as processing fee not 20k
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      Its 0.25% of loan amount or 20k+Taxes (Whichever is lower)
Mukesh Chougule

Hi Nitin,
I have taken a home loan of 25,22,000 from UCO bank at interest rate of 12.25% for 20 yrs.I am not happy with the service and also the interest rate and want to switch to some other banks home loan may be SBI. Will there be any penalty charges while transferring loan from UCO to SBI, if yes approx how much.SBI ask me to pay Rs 20,000 as processing fees of loan transfer, but wat about penalty of UCO.
Please advice.

Thanks
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  If your are closing your loan account through 3rd party sourcing i.e. loan transfer then u need to pay penalty..For extent of penalty, please check with UCO bank as it vary from bank to bank & keep changing.
  - Mukesh Chougule
    
    Hi Nitin,
    Thanks for your reply and suggestion.Is it a good idea to transfer loan from UCO to SBI. Is service of SBI better than UCO?
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      Service of SBI is also equally bad at the time of availing loan but after that you will get online access to your loan account which is very good..If you know any SBI bank manager in your city then it will smooth ride…
      - Mukesh Chougule
        
        Thanks Nitin for your valuable suggestions.
  - Arun
    
    I think you are wrong. It depends on when he took that loan RBI has abolished Prepayment penalties on floating rate interst loan even if its 3rd party……
    - Mukesh Chougule
      
      Hi Arun,
      Thnks for the comment.Can you pls share some more inputs.I have taken loan in Nov 2011
      - Shailendra Singh
        
        Hi Nitin, this is my first post, but my dear freind you are wrong. National housing bank has clearly stated (I have that circular) that no prepayment penalty is applicable on floating rate loan, even if you take loan from 3rd party for prepayment.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      penalty is abolished only if prepayment is from own source
raj

Please suggest!!! I have taken a loan from LICHFL @ 11.20% Fixed for 3 years. One and Half year is completed. i am looking to change my loan from LICHFL to SBI since they are offering 10.15%. But LIC is charging 2% penalty for repayment. Please suggest what to do in this case. Is there any benefit if I switch the loan because SBI will also charge the processing fee?
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  Pls wait for interest rates to fall to level of 9% else it is not beneficial for u.
  - raj
    
    Thanks Nitin for your advice. One more thing i need to add is, the total sanctioned loan amount was 35L but actual disbursed amount is 27L. So in this case what will be benefited me?
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      No, it will not help
skarthik11

Hi Nitin,

This is regarding home loan taken through LICHFL during Feb 2006. As posted by other users the interest rate climbs from 7.5% to 11.65% as on date….My query is
1. These interest rate hike has been increased non periodically which is against agreement which says review every quarter – Jan, April, July, October.

2. One interest hike letter was sent on November 8th 2007 which is in effect from 1st August 2007. Is it possible to hike interest pre-dated.

3. No where in the agreement they have mentioned how the interest rate will vary (they haven’t mentioned anything about LHPLR rate and the discount or spread)

4. Recently OCT 2011 though LICHFL LHPLR increase by 0.15% (from 14.25% to 14.40%) , my interest has been increased by 40bps during the same month.

5. Do LIC have conversion charge to reduce this interest rate similar in HDFC
Kindly advice how to handle this with LICHFL as they don’t have proper customer service.
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  1. Pls check your loan agreement on Interest Rate reset dates
  2. They might have dispatched letter late..Interest rate cannot be revised retrospectively
  3. It should be there…They paste separate note on last page of loan agreement..Pls check..If not there then approach LIC for same
  4. Not possible, Pls ask for clarification from LIC
  5. Yes, they have this facility but like HDFC they don’t offer this to everyone but only few customers who create ruckus or request for loan transfer to other bank.
  - skarthik11
    
    Hi Nitin,
    Thanks for your prompt reply
    1. Agreement clearly says the reset dates will be 1st January,1st April, 1st July, 1st October…..but not a single time this followed.
    2. Even letter dated late….it has to be reset from 1st October if they are sending letter on November.
    3. Ofcourse there is a separate attachment at the last, but no LHPLR terms in entire agreement.
    - http://www.nitinbhatia.in/ Nitin Bhatia
      
      I request you to write a letter to Zonal Head highlighting these points and you may also consider filing case against LICHFL in consumer court
Kishore

Hi Nithin, I’m in dilema whether to go for SBI or LIC or HDFC. My loan requirement is 40Lakhs for a tenure of 15 years in hyderabad.

1.I’m Inclined towards LIC bhagyalakshmi scheme which is giving me @10%, LICHFL agent says .25 percent rebate will continue for entire tenure. Is it true or is it only for the first 2 years ? I could not get complete details online.

2. As per the LIC agent, Under regular scheme intrest rate is 10.25 but processing is around 8000. Under Bhagya Lakshmi scheme the processing fee is coming to 22000 (0.5 % + Taxes.). If bhagya lakshmi scheme rebate is only for first 2 years then i dont think it makes sense.

3. I just came across SBI which claims “we charge interest on a daily reducing balance”. Can you please throw some light on how LIC does ? If LIC does it on Montly or Quarterly how will it change the amount of intrest I pay.

4. Given same principal (X) and Intrest rate (Y) and Tenure (Z). Will the EMI or the final interest change from bank to bank? If so please let me understand how. Most emi calculators give the same EMI.

5. From the below comments I understand that you suggest HDFC over LIC , can you please help me understand.?
- skarthik11
  
  Hi pls check how on what basis this 10% is calculated….pls see my post below on how LIC cheating people…If I’m not wrong this 10% is fixed for 1 year and immediately your interest will be 11.9% which is 2.5% spread from an LHPLR of 14.4 %
  - http://www.nitinbhatia.in/ Nitin Bhatia
    
    I agree
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  1. Not true
  2. Its a marketing Gimmick
  3. Daily reducing balance means principal outstanding is calculated on daily basis to fix interest e.g. if ur principal outstanding is 10 lacs and u made a payment of 1 Lac principal outstanding on 16th of a month then in daily balance reducing u will be charged interest on 9 lac for rest 14 days of month. In monthly reducing, u will pay interest for month on 10 Lac though u paid 1 Lac on 16th of month i.e. u r paying interest for amount u already paid…In quarterly reducing balance..the principal outstanding is rest every quarter
  4. It will be same
  5. LIC offer lower interest rate for 3 months and then increase it to 11.9%..This is not the case with HDFC
Raviprem

Hi Nitin, I have taken a loan of 40,000,00/- from LIC in Jan 2012 though i was opting for floating they have provided me with a fixed rate of interest of 11.4% for first 5 years, Though i was not interested with 5 yr fixed as i was badly in need of loan and so have quickly accepted their terms … now i want to switch to floating rate of interest and the agent says that it not viable and not economical for me if i change from fixed to floating as i will be ending up in paying more or less same rate of interest …. please suggest thanks — Raviprem
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  It’s possible..You need to pay conversion fees..Pls check on spread or discount on existing LHPLR before taking a final call.
Viral

Hi Nitin,

I read your blog about detailed information on the base rate and RPLR. It helped me understand these two terms.Thank you for the infromation.

I have taken loan of 35,00,000 from PNBHFL with intrest rate of 10.75%. I am planning to move my loan from PNBHFL to SBi. SBI is providing me home loan with intrest rate of 10.10%.

Could you please advise whether i should move my home loan from PNBHFL to SBI or if you think that i can move my home loan to any other bank then please suggest.

Thanks in advance for your guidance.

Viral
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  I have answered this query
Viral Trivedi

Hi Nitin,

I read your blog about detailed information on the base rate and RPLR. It helped me
understand these two terms.Thank you for the infromation.

Six months back I have taken loan of 35,00,000 from PNBHFL for 20 Yrs with intrest rate of 10.75%. I am planning to move my loan from PNBHFL to SBI. SBI is providing me home loan with intrest rate of 10.10%.

Could you please advise whether i should move my home loan from PNBHFL to SBI or if you think that i can move my home loan to any other bank then please suggest.

Thanks in advance for your guidance.

Viral
- http://www.nitinbhatia.in/ Nitin Bhatia
  
  At this stage, i will not recommend…If ROI differential is atleast 2% then u may shift..if u shift now then it will be financial loss for u.
Nitin

Loan
http://www.nitinbhatia.in/ Nitin Bhatia

if your prepay from own source then no penalty but if you are prepaying from 3rd party i.e. loan transfer etc then penalty is applicable.
Ash

HI Nitin,

I have an outstanding loan from ICICI HFC @ 11.5% of 33 lacs for tenure of 8 years. This loan is not linked to base rate.

Now if i switch to SBI the rate that they are offering is 10.!%.
Would you suggest that i switch to SBI?
Sunil Tiwari

Rs. 10,00,000/- home loan was taken from HDFC in 2005, and today it is @ 16%; after reading your messages now keen to shift to other bank, pls advise PNBHFL or Axis Bank or SBI
mangesh

Hi Nitin
I have home loan 13 Lacs from Pnbhfl its ir is 10.75%.
Should i move to SBI for lower interest or i have to
continue with Pnbhfl
Thanks
Mangesh Mane
mangesh2100@gmail.com
saran

Hi… I have a home loan from LIC HFL for 22L for the past 01 year for 20 years. It is a fixed rate (11.15%) for the first five years and then floating based on market rates. I now come across a SBI advt for home loans at 9.5 %. Really confused. Should i go for change of the home loan to SBI. Pse advise..what are pros and cons?
- saran
  
  Sorry…SBI home loan @ 9.95% floating.