Home Loan Interest Rates and Charges
Bajaj Housing Finance offers attractive Home Loan interest rates starting at 8.30%* for salaried and professional individuals. Borrowers also have the advantage of availing of a sizeable sanction with minimal documentation and quick processing and approval.
The rate of interest offered to you depends on several factors. Two of the key factors here 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 in terms of 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.
Interest Rates for Salaried and Professional Applicants
Salaried Floating Reference Rate:14.80%*
Home Loan Interest Rate (Floating)
| Loan Type | Effective ROI (p.a.) |
|---|---|
| Home Loan | 8.30%* to 14.00%* |
| Home Loan (Balance Transfer) | 8.30%* to 14.00%* |
| Top Up | 9.20%* to 15.00%* |
Interest Rates for Self-Employed Applicants
Self-Employed Floating Reference Rate: 15.25%*
Home Loan Interest Rate (Floating)
| Loan Type | Effective ROI (p.a.) |
|---|---|
| Home Loan | 8.55%* to 14.00%* |
| Home Loan (Balance Transfer) | 8.90%* to 14.00%* |
| Top Up | 9.40%* to 15.00%* |
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.
Home Loan: Other Fees and Charges
| Type of Fee | Charges Applicable |
|---|---|
| Processing Fee | Up to 7% of the loan amount |
| Loan Statement Charges | NIL |
| Interest and Principal Statement Charges | NIL |
| EMI Bounce Charges | Up to Rs.3,000 |
| Penal Interest | Up to 2% |
| Secure Fee | Up to Rs.4,000 (one-time) |
*Applicable following the first EMI clearance.
Home Loan Part Prepayment Charges and Foreclosure Charges
| Borrower Type: Individual | Term Loan | Flexi Term Loan |
|---|---|---|
| Time Period (months) | >1 | >1 |
| Foreclosure Charges | Nil | Nil |
| Part-Prepayment Charges | Nil | Nil |
*For purposes other than business
| Borrower Type: Non-Individual | Term Loan | Flexi Loan |
|---|---|---|
| Time Period (months) | >1 | >1 |
| Foreclosure Charges | 4%* on the Principal Outstanding | 4%* on the Sanctioned Amount during the Flexi Interest Only Loan Repayment Tenor; and 4%* on the available Flexi Loan Limit during the Flexi Term Loan Tenor |
| Part-Prepayment Charges | 2%* on the Part-Prepayment Amount | Nil |
* GST as applicable will be payable by the Borrower in addition to thePrepayment Charges
Bajaj Housing Finance extends competitive 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.
Types of Interest Rates on Home Loans in India
Lenders offer loans at two main types of 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 is not 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, at times, do add a reset date, which allows them to change the rate after a certain period to match market conditions.
It is best to opt for this type of Housing Loan interest rate when current rates are expected to increase. This way, you avail of 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 usually allow you to change from a fixed rate to a floating rate during the repayment period.
- Floating Interest Rate
Of the two types of interest rates on a 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. 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. Typically, lenders account for the change in the interest outflow by keeping the EMIs the same but changing the tenor to match the difference.
It is better to opt for floating 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 mandate.
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.
Note: At present, Bajaj Housing Finance does not offer Home Loans at fixed/mixed interest rates.
Difference between Fixed Interest Rate vs. Floating Interest Rate
Knowing the difference between floating vs. fixed interest rates can help borrowers make an informed decision. Find out the difference between fixed and floating interest rates below.
Comparison between Fixed and Floating Interest Rate
| Fixed Interest Rates | Floating Interest Rates |
|---|---|
|
Remain the same throughout the repayment tenor and are not affected by market conditions until the reset date |
Change according to market conditions and are dependent on the external benchmarks followed by the lender |
| EMIs remain constant for the repayment period |
Either the EMIs change or the tenor is adjusted to keep the EMIs the same |
|
Higher than floating interest rates (typically by 1–2.5%) |
Lower than fixed interest rates (typically by 1–2.5%) |
|
Lenders levy a nominal charge for part-prepayment and foreclosure |
Lenders do not levy part-prepayment or foreclosure charges for individual borrowers |
|
Suitable when there is a possibility of an increase in existing interest rates |
Suitable when existing interest rates are expected to decline |
| Less risky as it makes it easier to forecast exact repayment as EMIs remain the same |
Higher risk as rates are dependent on the market factors and you may end up paying more if interest rates increase |
|
Generally suitable for a short or medium repayment period of 3 to 10 years |
Suitable for a longer repayment tenor of 20 to 30 years |
|
Makes financial planning easier as borrowers can prepare a budget |
Makes financial planning a little trickier as floating interest rates can be uncertain |
|
Rates remain the same throughout, thus providing a sense of security |
Rates are subject to revision, but you enjoy the advantage of low rates as per market conditions |
How to Calculate Interest on Home Loan?
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 an EMI calculator online to get error-free results. Use the Bajaj Housing Finance Home Loan EMI Calculator by following the below steps.
- Enter the loan amount you want to avail of
- Choose a repayment tenor
- Select the applicable rate of interest
The tool will give 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 an EMI of Rs.16,729 and a 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
You can compute EMIs the traditional way using a formula. However, this can be time-consuming and increases the possibility of errors. Here is the formula:
EMI = [P x r x (1+r)^n]/[(1+r)^n-1]
Where:
‘P’ is the principal or loan amount
‘r’ is the rate of interest
‘n’ is the tenor in months
Factors that Impact Your Home Loan Interest Rate
There are many factors that affect Housing Loan interest rate, including external market conditions, such as the RBI repo rate and inflation. Some of the other factors that affect Home Loan interest are in your control. These depend on your eligibility for the loan and aspects such as your income, credit score, and more. Apart from these, the LTV and tenor you choose are also important factors that affect the 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 your overall interest rate outflow. 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 the Home Loan interest rate offered to you. They affect your repayment ability, and lenders offer a competitive rate to 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 mandate. However, you can choose to pay a higher down payment to reduce the loan amount. Doing this can help enhance your eligibility, as 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 Location and Condition
Property value is another factor that affects 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 may charge higher interest.
How to Get Low Home Loan Interest in India
Every 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 showcasing 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 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 offers competitive interest rates starting at just 8.30%* p.a. for salaried and professional applicants.
Maintain a High Credit Score
The easiest way to secure the lowest possible 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.
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 proceed if you are saving more despite these charges.
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 and professional applicants can apply for a fresh Home Loan today and pay EMIs as low as Rs.755/Lakh*.
The current interest rates applicable to Home Loans differ based on borrower type. Self-employed applicants can avail of a Home Loan with Bajaj Housing Finance with floating interest rates starting from 8.55%* p.a. On the other hand, salaried individuals and professionals can avail of a Home Loan with interest rates starting from 8.30%* 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 will lower the interest amount payable.
On the other hand, a fixed interest rate remains the same throughout the repayment tenor or till a reset date. Such a rate can be beneficial when the interest rates are on an upward trend.
Before you choose an interest rate type, use a Home Loan Interest Calculator to assess the difference in the total amount payable with a fixed rate versus a floating rate to make an informed decision.
When applying for a Home Loan with us, applicants are required to pay a processing fee of up to 7% of the total loan amount. Bajaj Housing Finance keeps its Home Loan processing fees nominal and affordable, ensuring minimum strain on the borrower’s finances when availing of the advance
In simple words, the interest rate depends on your credibility as a borrower, market conditions, and of course, the property in question. Below is a more detailed explanation for each of these.
Your credit profile
Your credit profile, including the credit score and report, establishes the risk involved in lending and determines the interest rate levied by us. Applicants with a reliable credit report and a high CIBIL score of 750 and above are typically offered the lowest Home Loan interest rates.
Benchmarking system
Our benchmarking system also impacts the interest rate for loans. Home loans with a lending rate based on MCLR lack transparency and often prove to be expensive for borrowers. On the other hand, external benchmark linked home loans are directly linked to key policy rates such as the repo rate and reflect changes in the next EMI.
The property’s market value and location
The current market value and location of the property also play a key role in determining the lending rate. High-priced properties at well-connected locations remain a good proposition for lenders and attract competitive Home Loan interest rates.
*Terms and conditions apply
