Home Loan Interest Rates 2022

Bajaj Housing Finance offers attractive home loan interest rates starting at 6.65%* for salaried individuals and 8.25%* self-employed individuals. Borrowers also have the advantage of availing of a high value sanction with minimal documentation and quick processing and approval.

The rate of interest offered to you depends on several factors, two of the most important ones of which are your eligibility and credibility as a borrower. With the right profile, you can take advantage of a low 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, transparency in additional fees and charges, such as the loan processing fee, can significantly impact your borrowing decision and experience. With us, you are assured of complete transparency to how much you pay, when, and why.

Housing Loan Interest Rate for Salaried and Self-Employed Individuals

Housing loan interest rates differ for salaried and self-employed borrowers. With Bajaj Housing Finance, or in fact any other lender, applicants can avail of the best home loan rates by meeting the loan eligibility criteria and showcasing a strong credit profile. When you take a loan from Bajaj Housing Finance (BHFL), you not only enjoy attractive interest rates but also transparency in fees and charges.

Home Loan Interest Rate for Salaried & Self-Employed Borrowers

Salaried Floating Reference Rate: 12.90%*

 

Self-Employed Floating Reference Rate: 13.30%*

 

Repo Rate: 4.00%

For a complete list of fees and charges, 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 loan below or above the documented rate of interest (upto 100 basis points) in deserving cases on exceptional basis under the powers of the competent authority, vested with them.
• The above-mentioned rates are applicable to new loans sanctioned after August 2020 and not applicable to existing loans.
• BHFL FRR was applicable on all types of loans booked by Bajaj Housing Finance till March 2018; however, it is only applicable to unsecured loans since April 2018.
• 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.

*BHFL FRR was applicable for all types of loans (secured and unsecured) by the company on or before 18 March. Post 18 March, it is only applicable for unsecured loan.

Home Loan: Other Fees and Charges

*Applicable following the first EMI clearance. 

Home Loan Part Prepayment Charges and Foreclosure Charges

*For purposes other than business

* GST as applicable will be payable by the Borrower in addition to the Prepayment Charges

Bajaj Housing Finance extends the best home loan interest rates to borrowers to make financing convenient and repayment affordable in the long term. Applicants can choose from fixed and floating rates, as per their suitability.

Use our home loan EMI calculator to compare the current home loan interest rates and charges and how they affect your EMIs. High eligibility, including income, credit profile, and employment status, will help you keep the home loan rates negotiable.

Lenders offer loans at two main types of home loan interest rates. The home loan interest rate in India is either fixed or floating.

• Fixed Interest Rate

This home loan interest rate remains the same throughout the repayment tenor. It isn’t affected by market changes and stays constant. The major advantage of a fixed interest rate is that it helps borrowers plan their loan repayment in advance and manage finances efficiently as the EMIs remain unchanged throughout the tenor. However, lenders do add a reset date with fixed rates that allows them to change this rate after a certain period to match market conditions.

It is best to opt for this type of home loan interest rate when current rates are expected to increase. This way, you can ensure that you avail a home loan at the lowest possible interest rate. However, it is not suitable to go for a fixed home loan interest rate when there is a possibility of a rate decrease in the future as this increases your payable interest. However, lenders allow you to change from fixed to floating during the repayment period.

• Floating Interest Rate

Of the two types of interest on home loan in India, floating rates are more popular as they are lower than fixed rates at the onset. Generally, floating interest rates are 1-2.5% lower than fixed interest rates. This home loan interest rate is variable, and changes during the tenor based on market fluctuations and benchmark rates. Most lenders account for it keeping the EMIs the same but changing the tenor to match the difference.

It is better to opt for such types of interest on home loans when the existing interest rates are expected to fall. The main advantage of choosing a floating rate as an individual borrower is that there are no charges on part-prepayment and foreclosure as per RBI mandates. This can help you use surplus funds to become debt-free faster.

There is also 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.

Knowing the difference between floating vs fixed interest rates helps borrowers make informed decisions. Find out the difference between fixed and floating interest rates below.

Comparison between Fixed and Floating Interest Rate

Calculating the total interest payable and the total repayment amount helps borrowers make better, more informed decisions. This aids in comparing lenders, planning repayment, and understanding the cost of borrowing. If you are wondering how to calculate home loan interest, here are three ways to do so.

Using a Home Loan Calculator

This is the simplest and the easiest way to calculate the total interest due and EMIs accurately. Calculate home loan interest using EMI calculator online to get error-free results. Use the Bajaj Housing Finance Home Loan EMI Calculator by following these steps.

• Enter the loan amount you wish to take
• Choose a convenient repayment tenor
• Select the applicable rate of interest

That’s it! This handy tool gives you precise results with the loan’s EMI amount, the total interest payable, and the total repayment amount. For example, a loan of Rs.20 lakh with a repayment tenor of 20 years and an 8% home loan interest rate will result in EMI of Rs.16,729 as EMI and total interest payable of Rs. 20,14,844.

Using Microsoft Excel

You can use the ‘PMT’ function in Microsoft Excel to calculate the EMIs and know the interest amount. Apply the following formula:

PMT (RATE,NPER,PV,FV,TYPE)

Where:

RATE is the interest rate offered by the lender divided by 12

NPER is the number of EMIs

PV stands for principal amount

Remember to set both the values of FV and TYPE to 0 (zero).

Using the manual EMI calculation formula

No matter the home loan interest rate in India, you can compute EMIs the traditional way using a formula. However, this can be time-consuming and increases the possibility of making errors. Here is the formula.

EMI = [P x r x (1+r)^n]/[(1+r)^n-1]

Here, ‘P’ is the principal or loan amount, ‘r’ is the rate of interest and ‘n’ is the tenor in months.

There are many factors that affect home loan interest rate, which include external market conditions such as RBI’s repo rate and inflation. There are also factors affecting home loan interest that are in your control. These hinge on your eligibility for the loan and things like your income, credit score and more. Apart from these, the LTV and tenor you choose are also important factors that affect home loan interest rate offered to you. Take a look at important ones that can help you save more during repayment.

• Interest Rate Type

The type of interest rate you opt for impacts the home loan interest rate you get. Fixed rates are normally higher than floating rates by 1-2%.

• CIBIL Score and Financial Stability

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 as the lender’s risk of default during repayment is reduced. Your job/work security, income or salary are also factors that affect home loan interest rate offered to you. They affect your repayment ability, and lenders offer a nominal rate to those borrowers who have a higher ability to repay on time.

• Home Loan Amount and Type

Loan-to-value ratio (LTV) is the percentage of the property’s market value the lender offers as a loan. In India, this varies between 75–90% as per RBI mandates. However, you can choose to pay a higher down payment to reduce the loan amount. Doing this actually helps you get lower interest rates, and the lender’s risk is reduced. Apart from this, interest rates are affected by the type of home loan you choose, be it for purchase, renovation, or construction.

• Property’s Location and Condition

The value of the property is also one of the factors affecting home loan interest rates. The location of the property, surrounding infrastructure, age of the property, and amenities available are all considered to evaluate its worth. If a property is considered valuable, lenders charge a more competitive interest. However, if a property is old or has a location that is not in demand, they charge a higher interest.

• Repayment Tenor

The repayment period you choose is also one of the factors that affect home loan interest rate. A longer repayment tenor is considered a higher risk by lenders and thus, borrowers may be charged an increased rate of interest. A shorter repayment tenor will fetch you a home loan at lower interest rates.

Every smart borrower wonders how to get low interest home loan as this decreases the cost of borrowing and makes repayment stress-free. Getting a low home loan interest in India

is simply a matter of improving your eligibility for the loan and maintaining a disciplined credit behaviour. Read on for some tips.

• Compare Lenders Before Applying

One of the most important things to do before taking a home loan is to compare the lenders for lower interest rates. While this is not the only criteria you should look for, this can help you get the lowest rate among all the options if you meet the lender’s eligibility terms. Bajaj Housing Finance Limited offers competitive interest rates starting at just 6.65% for salaried applicants.

• Maintain a High Credit Score

The easiest way to secure the lowest home loan interest rate is to have a high CIBIL score. This is a result of having some experience with various credit types, repaying loans and credit card bills on time, and keeping your credit utilisation ratio low. A high score shows lenders that you are a reliable borrower who is unlikely to default. Lenders reward this behaviour with a competitive rate.

• Make a Higher Down Payment

Not opting for the maximum LTV on your home loan also offers you interest benefits. Try to pay as much as possible as the down payment. This will prove your financial ability to lenders, and lenders will be more prone to allow you to negotiate for the lowest home loan interest rate.

• Select a Shorter Repayment Duration

While longer repayment duration lowers your EMIs, making them easier to pay, opting for a shorter repayment tenor can help you get a lower interest rate.

• Consider a Home Loan Balance Transfer

If you are wondering how to get low interest home loan while repaying your loan, consider transferring it to another lender offering a lower rate. This way, you can plan your finances better and save money. However, you should consider the fees and charges associated with switching your loan and only do this if you are saving more in spite of them.