A home loan is likely the single largest financial commitment you'll make — a 0.25% difference in rate over 20 years on a ₹50 lakh loan is ₹1.8 lakh of total interest. Unlike personal loans, home-loan rate bands are tight (8.40% to 11% at most lenders) because the loan is secured by the property itself. But the small band hides big differences in processing fees, benchmark choice, and prepayment flexibility. Here's the April 2026 view of 12 major lenders.
Home loan rate comparison — April 2026
| Lender | Starting rate | Benchmark | Processing fee |
|---|---|---|---|
| SBI Home Loan | 8.40% | EBLR | 0.35% (max ₹10,000) |
| Bank of Baroda | 8.40% | EBLR | 0.50% (max ₹25,000) |
| HDFC Bank | 8.50% | EBLR | 0.50% |
| ICICI Bank | 8.50% | EBLR | 0.50% |
| Axis Bank | 8.75% | EBLR | 0.50% |
| Kotak Mahindra | 8.65% | EBLR | 0.50% |
| LIC HFL | 8.50% | PLR | 0.50% |
| PNB HFL | 8.65% | PLR | 0.50% |
| IDFC FIRST Bank | 8.85% | EBLR | 0.50% |
| Bajaj Finance (HFL) | 8.75% | PLR | 1% (max ₹15,000) |
| Federal Bank | 8.60% | EBLR | 0.50% |
| Tata Capital | 8.75% | PLR | 0.50% |
MCLR vs EBLR — which benchmark is better?
Since October 2019, RBI has required banks to link new floating-rate retail loans to an External Benchmark Lending Rate (EBLR) — almost always the repo rate. Before that, the standard was MCLR (Marginal Cost of Funds based Lending Rate), an internal bank calculation. Housing Finance Companies (LIC HFL, PNB HFL, Bajaj HFL) aren't governed by RBI's EBLR rule and still use internal PLR benchmarks.
Why EBLR is better for borrowers: repo rate cuts flow to your EMI within one reset cycle (usually 3 months). MCLR/PLR changes are slower and often asymmetric — lenders delay passing rate cuts but speed up passing rate hikes. If you're taking a new loan in 2026, prefer an EBLR-linked bank loan over a HFL product unless the HFL rate is meaningfully lower.
PMAY subsidy — still available?
The Pradhan Mantri Awas Yojana (Credit Linked Subsidy) scheme for MIG segments closed for new applications on 31 March 2022. EWS/LIG urban applications technically closed December 2024 after multiple extensions, though individual bank-level processing of sanctioned cases continues. If you were counting on PMAY, confirm with your lender — most new sanctions in 2026 will not qualify.
PMAY-Urban 2.0 was announced in the 2024-25 Union Budget with a ₹10 lakh crore outlay over 5 years, but detailed scheme rules (subsidy rate, income bands, carpet-area caps) are still being rolled out state-by-state through 2026. Check your state housing board website before assuming PMAY 2.0 eligibility.
Balance transfer — when it makes sense
If you took a home loan 3+ years ago at 9%+ and your current lender is now quoting new borrowers at 8.40%, a balance transfer can save ₹3-8 lakh over the remaining tenure. The math works when:
- Rate differential is ≥ 0.50%.
- Remaining tenure is ≥ 5 years.
- Outstanding balance is ≥ ₹20 lakh.
The new lender will charge 0.25-0.50% processing fee on transferred balance, plus ~₹15,000-₹30,000 in legal/valuation fees. Prepayment at your existing lender is free (floating rates have zero prepayment penalty under RBI rules). Our full home loan balance transfer guide walks through the decision and paperwork.
Fixed vs floating vs hybrid
On a 20-year home loan, fixed rates are always structurally mispriced — no lender will lock in a 20-year rate at current prevailing levels without a risk premium of 1-2% over floating. Avoid pure-fixed home loans. Hybrid products (fixed for 2-3 years, then floating) are occasionally worth considering in a clearly rising-rate environment, but as of April 2026 with repo rate stable-to-falling, pure floating is the right choice.
What actually decides your rate
- CIBIL 800+: starting rate.
- Loan-to-Value (LTV): ≤80% LTV gets best rates; 85-90% LTV adds 0.25-0.50%.
- Property type: ready-to-move gets best; under-construction adds 0.15-0.30% until completion.
- Employer category: same A/B/C/D ladder as personal loans.
- Woman co-applicant: many banks offer 0.05% discount with woman as primary or co-applicant.
Check your home loan eligibility
Before shortlisting properties, use our loan eligibility calculator to see the maximum principal each lender will approve for your income. The typical rule is that total EMI (home + all other loans) cannot exceed 50-55% of net monthly income (FOIR). For the full category tour, see our home loans hub.
Frequently Asked Questions
Which bank has the cheapest home loan in India 2026?
SBI and Bank of Baroda publish the lowest starting rate at 8.40%, linked to EBLR. Your actual rate depends on CIBIL, LTV, and property type. For applicants with 800+ CIBIL and 70% LTV, the starting rate is typically achievable.
Is EBLR better than MCLR?
Yes, for new borrowers. EBLR is linked to the repo rate and reprices faster when RBI cuts rates. MCLR resets are slower and often delayed. All new bank home loans are EBLR-linked by RBI mandate.
Should I go for a 20-year or 30-year home loan?
30-year loans lower EMI by 15-20% but increase total interest by 40-60%. If the lower EMI helps you qualify for the property you want, take the 30-year and prepay aggressively when bonuses arrive. Prepayment is free on all floating-rate home loans.
Is a Housing Finance Company (HFL) home loan inferior to a bank home loan?
Not inferior, but different. HFLs aren't bound by RBI's EBLR rule, so they're slower to pass repo rate cuts. For borrowers with complex income (self-employed, freelance, rental), HFLs are often more flexible on underwriting.