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As per amendment in the Income Tax Rules, PAN or Aadhaar are to be mandatorily quoted for cash deposit or withdrawal aggregating to Rupees twenty lakhs or more in a FY. Please update your PAN or Aadhaar. Kindly reach out to the Bank’s contact center on 1800 10 888 or visit the nearest IDFC FIRST Bank branch for further queries.
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Home Loan Interest Rates - IDFC FIRST Bank
People have evolved to build a home of their own since time immemorial. It is said, “There is no place like home”. Unlike those in the past, homes of today are not easy to have for the high cost involved. With a home loan, you can have your dream of buying a new house realized. IDFC FIRST Bank can help you with a home loan at the most attractive interest rates.Read More
The low EMI option, minimal documentation and quick processing make the IDFC FIRST Bank Home Loans easy and feasible for any eligible applicant. You can avail a maximum loan amount of Rs 5 crores at the best home loan interest.Read Less
Benefits of Home Loan Interest rate with IDFC FIRST Bank
A home loan from IDFC FIRST Bank helps you gain several benefits like:
Customized Loans
You can ensure that you have a home loan tailor-made to your requirement.
Minimal Documentation
To process your loan, it requires only a few documents such as identity and address proof, income proof and property proof.
Maximum Tenure
If you are eligible, you can avail a maximum tenure of 30 years, which reduces your EMI amount.
Home Loans Interest Rates Table
| Employment Type | Product | Home Loan Rate |
|---|---|---|
| Salaried | Home Loan | 8.75% onwards |
| Home Loan Balance Transfer | 8.75% onwards | |
| Home Loan Top Up | Top Up at same ROI as BT subject to max capping of 100% of the BT loan amount | |
| Self-Employed | Home Loan | 8.85% onwards |
| Home Loan Balance Transfer | 8.85% onwards | |
| Home Loan Top Up | Top Up at same ROI as BT subject to max capping of 100% of the BT loan amount |
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Factors Affecting Home Loan Interest Rates
When it comes to the home loan interest rates in India, there are several factors that affect the rates. Paying in EMI is the usual repayment option for a home loan, and it becomes affordable with a competitive interest rate. Before you proceed to apply, it is better to check the factors that have an influence on the home loan interest rate, which in turn affects the EMI payable. Some of the factors are:
MCLR or Benchmark Rate
The Marginal Cost of Funds-based Lending Rate or MCLR is the minimum interest rate at which a bank can lend home loans. The MCLR rate is fixed considering several factors such as the marginal cost of funds, operating cost, cash reserve ratio (CRR) and tenure. The banks review the rate for the borrowers during the annual reset date of the MCLR, where the duration may be 3, 6 or 12 months. The home loan interest calculation is done and charged based on the changes in the MCLR rate.
The rate at which banks borrow money from the RBI (Reserve Bank of India) for short-term financing is called the repo rate. When the RBI hikes the repo rate, banks must pay more interest to the RBI to borrow money from it. This further increases the interest rate of home loans. It is, hence, essential to consider a hike in repo rate by the RBI before taking a home loan.
Type of Interest Rate
A home loan product is offered in three types of interest rates, and they are floating, fixed and mixed. A floating rate of interest changes depending on the RBI’s policy rate changes. For instance, if the repo rate is reduced, banks reduce the home loan interest rate and vice versa. IDFC FIRST Bank offers you home loans on a floating rate, offering the cheapest home loan rates.
The fixed rate will have the same rate of interest fixed at the time of the approval of the loan, and will continue until the end of the tenure. The mixed rate will have the fixed rate of interest first and later the floating one.
Loan-to-Value (LTV) Ratio
The percentage of loan offered on the property is called LTV ratio. The higher percentage shows the maximum amount of loan the bank offers to the applicant. The bank home loan interest rate will be higher owing to the increased risk involved in lending. You can reduce the loan amount by making a large down payment, and have the lowest home loan interest rate.
Loan Tenure
The tenure of the loan can increase or reduce the interest. For instance, the home loan interest for the tenure of 20 years is higher than that for 15 years. If you are looking for the cheapest home loan rates, check here on the IDFC FIRST Bank website.
Home loans with a longer tenure have a higher interest rate than those with a shorter term. You can use IDFC FIRST Bank's home loan EMI calculator to know the best tenure for your home loan.
Location of the Property
The property located in a prime place with all the basic amenities has a higher resale value than the one in the outskirts of the city. Therefore, banks offer loans for the property, with higher resale value, at a lower rate of interest, and for the lower resale value they charge higher interest rate.
Profile of the applicant
Any bank or financial institution considers applicants' job security before sanctioning their home loan request. If you have a stable job that establishes your ability to repay the home loan in time, you can benefit from lower home loan interest rates on a home loan.
Relationship with the bank
Banks offer preferential interest rates for customers with a good credit history. If your credit score is close to 800, and if you have a good relationship with the bank, you might get a home loan at a lower interest rate.
MCLR or Benchmark Rate
The Marginal Cost of Funds-based Lending Rate or MCLR is the minimum interest rate at which a bank can lend home loans. The MCLR rate is fixed considering several factors such as the marginal cost of funds, operating cost, cash reserve ratio (CRR) and tenure. The banks review the rate for the borrowers during the annual reset date of the MCLR, where the duration may be 3, 6 or 12 months. The home loan interest calculation is done and charged based on the changes in the MCLR rate.
The rate at which banks borrow money from the RBI (Reserve Bank of India) for short-term financing is called the repo rate. When the RBI hikes the repo rate, banks must pay more interest to the RBI to borrow money from it. This further increases the interest rate of home loans. It is, hence, essential to consider a hike in repo rate by the RBI before taking a home loan.
Type of Interest Rate
A home loan product is offered in three types of interest rates, and they are floating, fixed and mixed. A floating rate of interest changes depending on the RBI’s policy rate changes. For instance, if the repo rate is reduced, banks reduce the home loan interest rate and vice versa. IDFC FIRST Bank offers you home loans on a floating rate, offering the cheapest home loan rates.
The fixed rate will have the same rate of interest fixed at the time of the approval of the loan, and will continue until the end of the tenure. The mixed rate will have the fixed rate of interest first and later the floating one.
Loan-to-Value (LTV) Ratio
The percentage of loan offered on the property is called LTV ratio. The higher percentage shows the maximum amount of loan the bank offers to the applicant. The bank home loan interest rate will be higher owing to the increased risk involved in lending. You can reduce the loan amount by making a large down payment, and have the lowest home loan interest rate.
Loan Tenure
The tenure of the loan can increase or reduce the interest. For instance, the home loan interest for the tenure of 20 years is higher than that for 15 years. If you are looking for the cheapest home loan rates, check here on the IDFC FIRST Bank website.
Home loans with a longer tenure have a higher interest rate than those with a shorter term. You can use IDFC FIRST Bank's home loan EMI calculator to know the best tenure for your home loan.
Location of the Property
The property located in a prime place with all the basic amenities has a higher resale value than the one in the outskirts of the city. Therefore, banks offer loans for the property, with higher resale value, at a lower rate of interest, and for the lower resale value they charge higher interest rate.
Profile of the applicant
Any bank or financial institution considers applicants' job security before sanctioning their home loan request. If you have a stable job that establishes your ability to repay the home loan in time, you can benefit from lower home loan interest rates on a home loan.
Relationship with the bank
Banks offer preferential interest rates for customers with a good credit history. If your credit score is close to 800, and if you have a good relationship with the bank, you might get a home loan at a lower interest rate.
FREQUENTLY ASKED QUESTIONS
How is home loan interest rate calculated?
For the home loan interest rates, you can use the home loan EMI calculator on the IDFC FIRST Bank website to know the amount of EMI payable for different loan amounts. By changing the loan tenure and amount, you can arrive at the EMI amount affordable to you. It also helps you calculate the loan amount and interest separately for the entire loan tenure.
How to reduce home loan interest rate?
There are a few ways you can reduce your home loan interest, and they are:
- By transferring your existing loan to another lending bank, which offers a lower interest rate.
- Making prepayment of a part of your home loan amount, which will reduce the EMI amount and save money on interest
- Increasing the amount of EMI payable, which will in turn reduce the interest.
Which rate of interest is considered to be the better option?
Both the fixed rate and floating rate have their own advantages and disadvantages. However, a floating rate varies depending on the market conditions. If it reduces, the EMIs will be more affordable than before. Home loans offered on a floating interest rate have no charges during the part-prepayment or foreclosure.
What is the rate of interest and processing fee on Home Loans?
IDFC FIRST Bank offers home loans starting at 6.50 per annum*. The loan processing fee is up to 1% of the sanctioned loan amount. It starts from 0.2% of loan amount for salaried and 0.5% for self-employed.
Conclusion
A home loan can help you own a home of your choice. It keeps you indebted for a long period of 15 or 20 years, and therefore, it is essential to check the home loan interest rates to know the EMI affordable to you. Find the EMI payable on the home loan EMI calculator on the IDFC FIRST Bank website. To learn more about it, click here.
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If you are newly married or planning to get married soon, nothing can be more exciting than starting a new chapter in your life by moving into a home that you have purchased together. But did you know that there are many advantages to taking a joint home loan? From increased loan eligibility to greater tax benefits, there are many reasons why you should consider taking a home loan jointly with your spouse.
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