Home Loan interest rates: Public sector banks vs Private banks - A comparison
The public sector banks including State Bank of India (SBI), Punjab National Bank (PNB)
New Delhi: After the Reserve Bank of India (RBI) reduced the repo rate by 50 basis points in June, several banks have reduced their interest rate on new home loans to 7.5 percent (rates can vary as per the banks and the tenure selected for the loan).
The RBI has slashed a total of 100 basis points in lending rates in 2025 so far. After cutting the repo rate, the central banking authority has asked the banks to reduce the interest rates for both existing and new customers. Notably, some lenders also removed the processing fee.
Public sector banks like Punjab National Bank (PNB) and Bank of Baroda (BoB) have reduced interest rates and waived off processing fees to attract customers. Canara Bank has also slashed the interest rate by 110 basis points to 7.3 per cent. State Bank of India (SBI), country;s largest public sector bank, cut its key lending rates by up to 0.50 per cent after RBI’s repo rate cut announcement in June 2025.
State-owned PNB announced up to 50 basis points reduction in lending rate on the same day when RBI Governor announced that the Monetary Policy Committee unanimously decided to reduce the repo rate cut by 50 basis points.
Public Sector Banks Home Loan interest rates
| Name of the Bank | Initial Interest Rate (per annum) | Processing Fees | |
|---|---|---|---|
| Union Bank Of India | Starting from 7.35% | 0.50% of loan amount, maximum Rs 15000 + GST | |
| Bank Of Baroda | 7.50% to 9.20% | Starting from Rs 5000, depending on loan variant | |
| Central Bank Of India | Starting from 7.35% | 0.50% up to Rs 20,000 + GST | |
| bank of india | Starting from 7.85% | Starting from Rs 2500, depending on loan amount and variant | |
| State Bank of India (SBI) | Starting from 7.50% | 0.35% + GST, between Rs 2000 to Rs 10000 | |
| Canara Bank | Starting from 7.40% | 0.50%, Rs 1500 to Rs 10000 + GST | |
| Punjab And Sind Bank | Starting from 7.55% | Contact the bank | |
| Bank Of Maharashtra | Starting from 7.35% | Contact the bank | |
| Punjab National Bank (PNB) | Starting from 7.50% | 0.35% or ₹2500 (whichever is higher), maximum Rs 15000 | |
| IDBI Bank | Starting from 7.75% | 0.50% of the loan amount |
Private Sector Banks Home Loan interest rates
Private banks are yet to give the full benefit of the repo rate cut to the customers. ICICI Bank, HDFC Bank and Axis Bank have slashed home loan rates by 25, 60 and 40 basis points respectively. However, Yes Bank and RBL Bank are yet to slash the home loan rates.
| Name of the Bank | Initial Interest Rate (per annum) | Processing Fees |
|---|---|---|
| Kotak Mahindra Bank | Starting from 8.20% | 2% of loan amount + GST |
| HDFC Home Loan | Starting from 8.45% | 0.50% or Rs 3300 (whichever is higher) + GST |
| LIC Housing Finance | Starting from 8.00% | Rs 15000 to Rs 50000, depending on loan amount |
| Axis Bank | Starting from 8.75% | 1% or minimum Rs 10000 + GST |
| IDFC First Bank | Starting from 8.85% | Up to 3% of the loan amount |
| HSBC Bank | Starting from 8.25% | 1% or Rs 10,000 (whichever is higher) |
| Karur Vysya Bank | Starting from 8.45% | Starting from Rs 2500 + GST |
| Saraswat Bank | From 8.15% to 9.20% | Starting from Rs 2500 + GST |
| Jammu And Kashmir Bank | Starting from 8.10% | 0.25% or Rs 2000 to Rs 50000 + GST |
| South Indian Bank | Starting from 8.30% | Rs 5000 to Rs 10000 + GST |
| Federal Bank | Starting from 9.15% | Rs 10000 to Rs 200000 |
| standard Chartered Bank | Starting from 8.95% | Contact the bank |
| Karnataka Bank | Starting from 8.62% | Contact the bank |
| Dhanlaxmi Bank | Starting from 9.35% | 1%, minimum Rs 10000 + service tax |
| Tata Capital | 8.75% (salaried) and 8.85% (self-employed) | Rs 5000 + GST |
| Tamilnad Mercantile Bank | Starting from 9.25% | Contact the bank |
| Bandhan Bank | Starting from 8.66% | Contact the bank |
| yes bank | Starting from 9.00% | 1.5% or Rs 10000 (whichever is higher) + GST |
| HUDCO Housing | Starting from 8.75% | No charges |
| Aditya Birla Capital | Contact Us | Upto a maximum of 1% of the loan amount |
| GIC Housing Finance | Starting from 8.80% | Rs 2500 + GST |
| Truhome Finance | Starting from 8.50% | Contact Us |
| India Shelter Finance | Contact Us | Contact Us |
The data mentioned in the table is taken from Bank Bazaar.