Current Home Loan Interest Rates (June 2024)
Bajaj Housing Finance offers attractive Home Loan interest rates starting from 8.50%* p.a. for salaried individuals. Borrowers also have the advantage of availing of a sizeable sanction with minimal documentation, quick processing, and instant loan approval.
The rate of interest offered to you depends on several factors. Two of the key factors are your eligibility and credibility as a borrower. With the right profile, you can take advantage of a more competitive interest rate and better lending terms. While these are the most essential considerations in availing of a Home Loan, several other aspects hold considerable weightage too.
For instance, disclosure of additional fees and charges, such as the loan processing fee, can impact your borrowing decision and experience. With us, you can be assured of complete transparency in terms of how much you pay, when, and why.
Home Loan Interest Rates for Salaried and Self-Employed Individuals
The interest rates on housing loans are different for salaried and self-employed borrowers. Your credit score, income, and employment history are evaluated, among other factors, to calculate your Home Loan Eligibility. By fulfilling the eligibility requirements, applicants can obtain a favourable Home Loan interest rate from Bajaj Housing Finance. The following tables show the current Home Loan interest rates for salaried and self-employed applicants:
Interest Rates for Salaried Applicants
Salaried Floating Reference Rate: 15.40%*
Home Loan Interest Rate (Floating)
| Loan Type | Effective ROI (p.a.) |
|---|---|
| Home Loan | 8.50%* to 15.00%* |
| Home Loan (Balance Transfer) | 8.70%* to 15.00%* |
| Top-up Loan | 9.80%* to 18.00%* |
Interest Rates for Self-Employed Applicants
Self-Employed Floating Reference Rate: 16.00%*
Home Loan Interest Rate (Floating)
| Loan Type | Effective ROI (p.a.) |
|---|---|
| Home Loan | 9.10%* to 15.00%* |
| Home Loan (Balance Transfer) | 9.50%* to 15.00%* |
| Top-up Loan | 10.00%* to 18.00%* |
Salaried individuals and self-employed professionals can also avail of Repo Rate linked Home Loans.
For a complete list of interest rates, please click here.
- Bajaj Housing Finance charges an additional rate, called ‘spread,’ over the benchmark rate to arrive at the final lending rate. The spread varies on the basis of various parameters, including the bureau score, profile, segments, and approval from competent authorities, among others.
- BHFL may grant loans below or above the documented rate of interest (up to 100 basis points) in deserving cases on exceptional basis under the powers of the competent authority, vested with them.
- The above benchmark rates are subject to change. Bajaj Housing Finance will update the current benchmark rates on this website in the event of a change.
Other Fees and Charges
| TYPE OF FEE | CHARGES APPLICABLE |
|---|---|
| Processing Fee | Up to 4% of the loan amount + GST as applicable |
| EMI Bounce Charges | Refer to the table provided below for the full break-up |
| Penal Charges | Click here to know about the penal charges |
EMI Bounce Charges
| Loan Amount | Charges |
|---|---|
| Up to Rs.15 Lakh | Rs.500 |
| More than Rs.15 Lakh and up to Rs.30 Lakh | Rs.500 |
| More than Rs.30 Lakh and up to Rs.50 Lakh | Rs.1,000 |
| More than Rs.50 Lakh and up to Rs.1 Crore | Rs.1,000 |
| More than Rs.1 Crore and up to Rs.5 Crore | Rs.3,000 |
| More than Rs.5 Crore and up to Rs.10 Crore | Rs.3,000 |
| More than Rs.10 Crore | Rs.10,000 |
Prepayment and Foreclosure Charges
Individual borrowers with Home Loans linked to floating interest rates pay no additional charges on the prepayment or foreclosure of the housing loan amount. However, this may change for individual borrowers and non-individual borrowers who have loans for business purposes.
For individual and non-individual borrowers with floating interest rate loans for non-business purposes:
| Particulars | Term Loan | Flexi Term Loan | Flexi Hybrid Loan |
|---|---|---|---|
| Part-prepayment Charges | Nil | Nil | Nil |
| Full Prepayment Charges | Nil | Nil | Nil |
For individual and non-individual borrowers with floating interest rate loans for business purposes and all borrowers with fixed interest rate** loans:
| Particulars | Term Loan | Flexi Term Loan | Flexi Hybrid Loan |
|---|---|---|---|
| Part-prepayment Charges | 2%* on Part-prepayment | Nil | Nil |
| Full Prepayment Charges | 4%* on Principal Outstanding | 4%* on the available Flexi Loan Limit | 4%* on the Sanctioned Amount during Flexi Interest Only Loan Repayment Tenor; and 4%* on the available Flexi Loan Limit during Flexi Term Loan Tenor |
*GST as applicable will be payable by the borrower in addition to the Prepayment Charges.
**Nil for Home Loans closed by borrowers out of their own sources. Own sources refer to any source, other than borrowing from a bank/NBFC/HFC and/or a financial institution.
Purpose of Loan
The following loans shall be classified as loans for a business purpose:
- Lease Rental Discounting Loans
- Loans Against any Property availed for a business purpose, i.e., working capital, debt consolidation, repayment of business loan, expansion of business, acquisition of business assets or any similar end usage of funds
- Loan for purchase of Non-Residential Properties
- Loan against security of Non-Residential Property
- Top-up Loans for a business purpose, i.e., working capital, debt consolidation, repayment of business loan, expansion of business, acquisition of business assets or any similar end usage of funds
Types of Home Loan Interest Rates in India
The housing loan interest rate can be of two types:
Fixed Interest Rate
The fixed interest rate remains constant for a specific period and it is not affected by market changes. The major advantage of a fixed interest rate is that it can help in predicting your loan repayment journey in advance. However, a fixed interest rate typically comes with a reset date and can be changed after a certain period to match market conditions.
It is best to opt for this type of interest rate when current rates are expected to increase. This way, you avail of a housing loan at the lowest possible interest rate. However, it is not suitable to go for a fixed-rate Home Loan when there is a possibility of a rate decrease in the future, as this increases your total interest payable.
Floating Interest Rate
Of the two types of Home Loan interest rates in India, floating interest rates are lower than fixed interest rates at the onset. Generally, floating interest rates are 1-2.5% lower than fixed interest rates. A floating loan interest rate is variable and changes during the tenor based on market fluctuations and benchmark rates, which means your interest outflow keeps changing.
The main advantage of a Home Loan with a floating rate as an individual borrower is that there are no charges on part-prepayment and foreclosure.
There is also a third option of mixed interest rates, where interest is levied at a fixed rate at the beginning and then converted into a floating rate after a set period. At present, Bajaj Housing Finance offers Home Loans at floating interest rates and dual rates — a combination of fixed and floating interest rates.
Different Methods to Calculate Housing Loan Interest Rates
Looking to calculate Home Loan Interest? When availing of a Home Loan, it's important to understand the Home Loan interest you will be paying over the loan tenor. Here are two methods to calculate your overall interest payable:
Method 1: EMI Calculator
You can simply calculate the interest amount on your Home Loan by using a Home Loan EMI Calculator. Input the following information into the calculator's fields:
- Home Loan amount
- Loan repayment tenor
- Rate of interest
Once you have entered these details, you will get a detailed breakup of your loan, including the amount payable towards interest.
Method 2: EMI Calculation Formula
Alternatively, use this formula to calculate your EMI liability:
EMI = [P x r x (1+r)^n]/[(1+r)^n-1]
Here, P is the principal, r is the rate of interest, and n is the number of instalments or loan tenor in months.
Understanding Effective Interest Rate
The interest rate on a Home Loan has two components: the base rate and markup rate. The combination of these two determines the interest rate you will be paying. Here is a breakdown of these components:
Base Rate: This is the standard lending rate of the bank applicable for all retail loans. It changes frequently based on various factors.
Markup: This component of a small percentage is added to the base rate to arrive at the effective interest rate (EIR) for a specific type of Home Loan. It varies from one type of loan to another.
Effective Interest Rate (EIR) = Base Rate + Markup
Since April 2016, the Reserve Bank of India (RBI) has mandated a new method for computing lending rates called the Marginal Cost of Funds based Lending Rate (MCLR). This method replaces the base rate system and takes into account various factors such as Repo Rate and deposits to determine the lending rate. This MCLR-based computation is slightly lower than the base rate.
Factors That Impact Your Home Loan Interest Rate
There are many factors that affect housing loan interest rates, including external market conditions, such as the Repo Rate and inflation. Some of the other factors that affect the interest rate of your Home Loan include:
Interest Rate Type
The type of interest rate you opt for impacts your overall interest rate outflow. Fixed rates are normally higher than floating rates by 1–2.5%. Please note, Bajaj Housing Finance currently offers Home Loans at floating interest rates and dual interest rates.
CIBIL Score
Your credit score depicts your creditworthiness. A high score of 750+ positions you as a reliable borrower. This can help you get a more competitive interest rate.
Financial Stability
Factors such as your job stability, income, and salary also affect the Home Loan interest rate offered to you. Borrowers who have a higher ability to repay their loan time, may get offered a more competitive rate.
How to Reduce Your Home Loan Interest Rates?
A lower interest Home Loan decreases the cost of borrowing and makes repayment more stress-free. Getting an attractive Home Loan interest rate in India is simply a matter of improving your eligibility for the loan and showcasing disciplined credit behaviour. The following are some tips to consider:
Maintain a High Credit Score
The easiest way to secure a lower Home Loan interest rate is to have a high CIBIL score. This is because a high score reflects a good credit history with various credit types in terms of your repayment track record and credit utilisation ratio.
Consider a Home Loan Balance Transfer
If you are wondering how to get a lower Home Loan interest rate while repaying your loan, you may consider transferring it to us for a more favourable rate.
This is known as a Home Loan Balance Transfer, which can help maximise your Home Loan savings. However, you should consider the fees and charges associated with switching your loan, and only proceed if you are saving more despite these charges.
*Terms and conditions apply
Home Loan Interest Rate FAQs
We offer sizeable loans at competitive interest rates with the benefit of flexible repayment over a long tenor. You are also assured of added convenience with the option to apply for a Home Loan online and avail of doorstep service for document collection. Salaried applicants can apply for a fresh Home Loan today and pay EMIs as low as Rs.733/Lakh*.
The current interest rates applicable to Home Loans differ based on the employment of the borrower. Self-employed applicants can avail of a Home Loan with Bajaj Housing Finance with interest rates starting from 9.10%* p.a. On the other hand, salaried individuals can avail of a Home Loan with interest rates starting from 8.50%* p.a.
Which of the two is better depends on market conditions. Typically, a fixed rate of interest benefits you when the interest rates are on an upward trend, and a floating rate of interest benefits you when the interest rates are on a downward trend.
A floating rate of interest refers to a rate that varies over time. It is linked to a lender's internal benchmark or an external benchmark, such as the RBI repo rate. In other words, the interest rate increases or decreases in tandem with the linked benchmark rate. Thus, under favourable market conditions, a reduced benchmark rate may lower the total interest amount payable.
On the other hand, a fixed interest rate remains the same till a reset date. Such a rate can be beneficial when the interest rates are on an upward trend.
When applying for a Home Loan with Bajaj Housing Finance, applicants are required to pay a processing fee of up to 4% of the total loan amount with GST as applicable.
There are three ways to reduce your Home Loan Interest Rates.
Boost your credit score: In India, credit scores range from 300 to 900, with a score of 750 or higher being considered good. The higher your score, the lower your interest rates are likely to be. This can even help you qualify for better Home Loan rates offered by lenders.
Consider a balance transfer: If you are currently paying high interest rates to your lender, you might want to explore the option of transferring your balance to Bajaj Housing Finance with the Home Loan Balance Transfer feature. This can potentially lower your interest rates and offer you better loan terms.
Negotiate with your lenders: If you have a good credit score and a history of making timely EMI payments, you may have more leverage to negotiate with lenders for a better Home Loan interest rate. Lenders may be willing to offer you a more favourable interest rate if you can demonstrate a history of responsible financial behaviour. Feel free to reach out to your lenders for better terms and conditions.
