Lowest home loan interest rates in 2026: PSU banks vs private banks; check lists

With the Reserve Bank of India (RBI) deciding to keep the repo rate steady at 5.25% after its latest Monetary Policy Committee (MPC) meeting early this month, many existing and prospective borrowers are now wondering how this decision could impact their home loan interest rates and monthly EMIs. Buying a home is one of the biggest financial decisions most people make, and for many, a home loan is the only way to turn that dream into reality. While a longer repayment tenure may make owning a house more affordable, it also means committing to regular EMI payments for a longer period and a higher interest payment overall.

How repo rate impacts home loan interest rates

The repo rate is the rate at which banks borrow money from the RBI. When the central bank cuts the repo rate, banks can borrow money from the RBI at lower rates. They transfer these benefits to their borrowers and cut loan interest rates.
Interest rates of most of the floating rate home loans are linked to external benchmarks such as repo rate and the rate of these loans fall first when RBI cuts the repo rate. Those with their loans linked to Marginal Cost of Funds-based Lending Rate (MCLR) also see a slow-paced transmission of the repo rate cut into their loan EMIs. There is no change in fixed interest rate loans.


In this write-up, we take you through the lowest home loan interest rates from public and private banks. The rates are for home loans above Rs 75 lakh.

Home loan interest rates of private banks (for loans above Rs 75 lakh)

Rank	Bank Name	Interest Rate (% p.a.)
1	South Indian Bank	7.20 onwards
2	Federal Bank	7.30 – 9.75
3	Karnataka Bank	7.31 – 11.69
4	ICICI Bank	7.45 onwards
5	HSBC Bank	7.45 onwards
6	Kotak Mahindra Bank	7.70 onwards
7	HDFC Bank	7.75 onwards
8	Tamilnad Mercantile Bank	7.90 – 9.30
9	Axis Bank	8.00 – 9.10
10	RBL Bank	8.20 onwards
11	CSB Bank	8.30 onwards
12	Bandhan Bank	8.41 – 12.58
13	Karur Vysya Bank	8.50 – 10.65
14	City Union Bank	8.75 – 10.50

Home loan interest rates of public sector banks (for loans above Rs 75 lakh)

Rank	Bank Name	Interest Rate (% p.a.)
1	Bank of India	7.10 – 10.00
2	Bank of Maharashtra	7.10 – 9.90
3	Indian Overseas Bank	7.10 onwards
4	Central Bank of India	7.10 – 9.15
5	Union Bank of India	7.15 – 9.50
6	UCO Bank	7.15 – 9.25
7	Indian Bank	7.15 – 9.55
8	Bank of Baroda	7.20 – 9.00
9	Canara Bank	7.20 – 10.00
10	State Bank of India	7.25 – 8.95
11	Punjab National Bank	7.25 – 9.20
12	Punjab and Sind Bank	7.30 – 10.70

Data from Paisabazaar (April 14, 2026)

What is an EMI?

EMI or Equated Monthly Instalment is a fixed amount paid by you to the bank on a specific date every month. For fixed rate home loans, the EMI is fixed, while for floating rate loans, it keeps changing with the rate. EMIs are used to pay both interest and the principal amount of a loan in a way that over a specific number of years, the loan amount is repaid to the bank along with interest.

What is the difference between the fixed rate and floating rate of interest?

In the fixed interest rate scenario, the interest remains constant throughout the loan period, while in the floating interest rate scenario, the interest can decrease or increase.

How is the interest rate of a home loan calculated?

The interest on home loans is usually calculated either on a monthly reducing or yearly reducing or daily reducing balance by the Bank. SBI charges interest on a daily reducing balance, as per a statement from the bank.