With an aim to tackle inflation, the Reserve Bank of India has been increasing the repo rate since May 2022. Following the same, banks are also passing the rate hike to borrowers.

In accordance with the current interest rates, the lender may review the interest rate and reset it after a predetermined period of time under the terms of a home loan. This provision enables lenders to raise interest rates in line with a rise in market rates. The home loan interest rate of customers changes when the reset date arrives.

Home loan linked to RLLR

The repo rate of the RBI has been chosen by the majority of banks as their external benchmark. Repo Rate Linked Lending Rate is the name for the lending interest rate that is linked to the repo rate (RLLR).

This implies that if the RBI changes the repo rate, your home loan’s interest rate will likewise change.

RLLR is composed of the repo rate of the RBI plus a spread or margin

RLLR = Repo rate + Margin charged by the bank.

With such interest rates, there is more uniformity and transparency for borrowers

The amount that a home loan provider charges a borrower for using the principal is known as the interest rate. Your monthly EMI for your mortgage is determined by the interest rate on your housing loan.

Home loan interest rate

These are 10 banks offering best rates on home loan



What are the factors that affect home loan interest rates?

According to the HDFC website, there are 7 main factors that can affect the interest rate on a home loan-

• Interest rate type
• Benchmark Lending Rate
• Loan To Value Ratio
• Financial Profile of the Borrower
• Repayment Tenure
• Location of the Property
• Reputation of the Home Loan Provider

Home loan documents

Documents differ depending on the person and occupation. Here is a look at basic documents required for a home loan as per Kotak Mahindra Bank.

• Identity Proof
• Income Proof
• Age Proof: PAN card, Voter ID, Aadhaar Card, Passport, Driving License
• Address Proof: Aadhaar Card, Passport, Voter ID, Driving License
• Banking information
• Relationship Proof
• Proof of educational qualification
• For a home loan, apply online now.