Every Indian dreams of owning a home, but the biggest hurdle between this dream and reality is the home loan interest rate. When people think of buying a house, government banks are often the first option that comes to mind. Even a slightly higher interest rate can lead to higher EMIs for many years, resulting in lakhs of rupees in additional payments. This is why most middle-class families continue to place their trust in public sector banks for home loans. With greater transparency, lower charges, and a dependable system, government banks remain the preferred choice. Let's find out which government bank is currently offering the cheapest home loan.
Comparison of home loan interest rates
According to recent data, some government banks are offering home loans at around 7%, which is considered quite attractive in the current market conditions. See the complete list below.
| Bank name | Interest Rate (per annum) |
| Bank of India | 7.10% |
| Canara Bank | 7.15% |
| Punjab National Bank | 7.20% |
| State Bank of India | 7.25% |
| Punjab & Sind Bank | 7.30% |
Bank of India takes the lead
Looking at the list, Bank of India (BOI) is currently offering the cheapest home loan at a rate of 7.10%. Right behind it is Canara Bank at 7.15%. The country's largest lender, State Bank of India (SBI), is offering a rate of 7.25%, which is still considered a very competitive rate in terms of security and network.
Why are government banks a better option?
The biggest advantage of government banks is transparency. There are usually no hidden charges, and the rules are clearly stated. Sometimes, during festive seasons or under special schemes, processing fees are also waived. In addition, government banks pass on the benefit of the RBI's repo rate cuts to customers relatively quickly.
Notably, your CIBIL score plays a crucial role in getting a low-interest rate. Typically, only customers with a credit score of 750 or higher qualify for the lowest interest rates. Banks may increase interest rates for those with lower scores.
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