Bank of Maharashtra Cut Home Loan Rates Making Buying a House More Affordable

Manoj Prasad

In a recent move, Bank of Maharashtra has reduced its home loan rate by 0.15% to 8.35%. This bank used to earlier charge 8.5% interest on home loans.

This rate cut was announced on January 3, 2024, bringing the adjusted home loan interest rate down from the previous rate of 8.5%. This reduction is part of the bank’s efforts to provide financial relief to its customers and foster their financial journey.

Additionally, Bank of Maharashtra has also waived off processing fees on fresh home loans till 31st March 2024.

Two other leading public sector banks, Bank of India and Union Bank of India are also offering home loans around 8.35% interest rate. On the other hand, SBI home loan rates start from 8.40%. Private banks such as HDFC and ICICI have also reduced rates below 8%.

This makes it an opportune time for home buyers to avail a loan for purchasing real estate property. The reduced rates make EMIs more affordable. Read on to know key things about home loans before finalizing one.

Here is a table of home loan interest rates for major Indian banks, including both public and private sectors, as of January 4, 2024:

Bank NameInterest Rate (p.a.)
Bank of Baroda8.40% to 10.60%
Central Bank of India8.35% p.a. onwards
Bank of India8.30% to 9%
State Bank of India8.40% p.a. onwards
HDFC Home Loans8.45% p.a. onwards
Kotak Mahindra Bank8.85% to 9.40%
ICICI Bank9.00% to 10.05%
Axis Bank9.00% to 9.40%
Union Bank of India8.75% to 10.70%
IDBI Bank8.75% to 11.45%
Indian Bank8.75% to 10.40%
Bank of Maharashtra8.30% to 10.75%
Please note that these interest rates are subject to change and may vary depending on the applicant’s credit profile and other factors. It is advisable to compare the interest rates offered by various banks before applying for a home loan.

Understand Types of Interest Rates for Home Loans

Home loans come with two main types of interest rates:

  • Fixed Rates: These remain constant through the tenure of the loan. Hence, your EMIs do not fluctuate even when market rates change. This helps in better budgeting.
  • Floating Rates: These are linked to an external benchmark such as the repo rate. So if the benchmark rate changes, your home loan’s interest rate also changes. This leads to fluctuation in EMIs.
  • While fixed rates provide stability, floating rates start lower. Evaluate both to pick the better option for your financial situation.

Key Factors that Determine Home Loan Interest Rates

Some key factors that play a role in deciding home loan interest rates by banks are:

• Credit score – Higher score leads to lower rates
• Income stability – Higher and steady income preferred
• Loan amount and tenure – Bigger loan for longer tenure means higher rates
• Property type – Rates vary for ready-to-move or under-construction property
• Employment type – Salaried borrowers get better rates than self-employed

So work towards improving these factors to avail cheaper home finance. Maintaining a high CIBIL score above 750 is highly recommended.

5 Critical Things to Check Before Taking a Home Loan

While comparing home loan interest rates is important, there are a few other aspects borrowers must evaluate:

  1. Processing fee and other charges – Opt for banks that levy low one-time fees
  2. Foreclosure charges – Evaluate prepayment and foreclosure penalties
  3. Tax benefit eligibility – Check if the interest paid is tax deductible
  4. Flexible repayment options – Opt for features like overpayments, top ups, etc.
  5. Doorstep services – Look for banks that provide in-person assistance

Read all terms and conditions diligently and clarify any doubts with the bank before signing off on a home loan deal. Avoid hidden charges or restrictive clauses.

Summing Up

The recent cuts in benchmark lending rates by the RBI have led banks to reduce interest rates on home loans. This coupled with lower processing fees make it viable to buy real estate by taking a loan. Ensure you get your financial paperwork in order to get approved for a sizeable loan amount easily.

While hunting for the best deal, do not just run behind the lowest interest rates. Thoroughly evaluate all other aspects discussed above before zeroing in on a suitable home loan product. Conduct due diligence by speaking to multiple banks and comparing all terms to make an informed decision.

I hope this detailed guide covering the latest home loan rates and key considerations for borrowers helps you find an optimal home financing option to turn your dream into reality! Let me know if you need any other information.

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