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The Reserve Bank of India (RBI) is projected to maintain policy rates at current levels, despite the second wave of the Coronavirus pandemic wreaking havoc on the economy. In its impending policy review, the bank's regulator may even decrease rates slightly.  With home loan interest rates already at historic lows, the year 2022 may be the greatest time to buy a house with borrowed money.  

However, a home buyer may find it difficult to choose the best financial institution from which he/she can borrow a home loan, while weighing not only the lowest interest rates but also the overall efficacy of the deal. We've compiled a list of the best banks to get a home loan from in 2022 to make things easier for borrowers. 

State Bank Of India (SBI) 

The government-run State Bank of India (SBI), India's largest mortgage lender, has aided over 30 lakh households in their home purchases to date. The lender, which was founded in 1955, now has over 24,000 branches in India and internationally. 

SBI home loan interest rate 

Interest Rate	Lowest Rate*	Highest rate*
For salaried individuals	6.7%	7.05%
For self-employed individuals	7%	7.40%

HDFC Bank 

Since its inception in 1977, HDFC has assisted over 80 lakhs people in purchasing homes. Even though the two companies are part of the same HDFC Group, it's crucial to emphasize that HDFC, a Mumbai-based housing finance business (HFC), should not be mistaken with HDFC Bank. 

HDFC home loan interest rate 

Interest Rate	Lowest rate*	Highest rate*
For salaried individuals	6.75%	7.40%
For self-employed individuals	6.75%	7.85%

ICICI Bank  

ICICI Bank, the country's second-largest private lender by market capitalization, was founded in 1994 as a wholly-owned subsidiary of ICICI Limited. ICICI Bank now has 5,288 branches in India. 

ICICI Bank home loan interest rate 

Interest Rate	Lowest rate*	Highest rate*
For salaried individuals	6.75%	7.95%
For self-employed individuals	6.95%	8.05%

Bank of Baroda  

After merging with Dena Bank and Vijaya Bank in April 2019, the Vadodara-based Bank of Baroda became India's third-largest bank after SBI.  

The bank was founded by the Maharaja of Baroda in 1908 and was nationalized by the government on July 19, 1969, along with 13 other major commercial banks in India. It now has over 10,000 branches in India and internationally. 

Bank of Baroda home loan interest rate 

Interest Rate	Lowest rate*	Highest rate*
For salaried individuals	6.75%*	9%
For self-employed individuals	7%	9%

Punjab National Bank 

Punjab National Bank (PNB), India's second-largest public sector bank, is also currently giving low-interest rates on home loans.  

The state-owned bank with headquarters in New Delhi was formed in 1894 and now has over 80 million customers and 6,937 branches in 764 cities. 

Punjab National Bank home loan interest rate 

Interest Rate	Lowest rate*	Highest rate*
For salaried individuals	6.80%	7.40%
For self-employed individuals	6.80%	7.40%

*The offered interest rate on a home varies based on various factors 

How to choose the best Home Loan? 

With interest rates currently below 7%, it may be an excellent moment for home buyers and investors to invest in real estate. In comparison to five years ago, property values have also undergone a correction. Furthermore, India's major residential areas feature a big number of ready homes in a variety of categories, giving buyers plenty of options. Those considering purchasing a home with the help of a home loan should choose their lender carefully to guarantee that they get a decent bargain throughout the loan term. Here are few more tips to choose the lender: 

• Examine the house loan's interest rate and other fees 
• Borrowers' first inclination is to choose the bank with the lowest interest rate, as even a small difference in interest has a significant impact on the monthly repayment. 
• Comparing rates to discover the best lender, on the other hand, would only look at your house loan from a partial perspective. Other fees, such as processing fees, technical assessments, and documentation fees, are commonly added to house loans by banks.  
• The borrower could be requested to pay anywhere from 25 to 200 basis points of the loan amount towards these fees, significantly increasing the loan's overall cost.  
• When you're looking at interest rates, see if the bank is willing to waive any of these fees. Choose the combination that appears to be the most cost-effective. 
• Is there any incentive offered by the bank for consumers with good credit scores? 
• While a borrower's credit score has always been an important factor in determining how much of a loan they are eligible for, it also determines the rate of interest that the bank will charge you.  
• Lenders, such as the Bank of Baroda, charge interest on loans based on the risk profile of the borrower. For example, the Bank of Baroda currently offers home loans at a rate of 6.85 percent. However, this rate is only offered to applicants with a credit score of 760 or more.  
• As a result, a borrower with a good credit score may be able to get a better deal on a house loan by choosing a bank that provides such services. 
• Is your bank's rate transmission quick? 
• Borrowers and the RBI have both expressed their dissatisfaction with this situation. Even though banks are quick to raise home loan interest rates in response to an upward movement in the repo rate (the rate at which the RBI lends credit to them), they are not as quick to pass on the benefits of rate cuts.  
• This is why, in 2016, the bank's regulator introduced the marginal cost of funds-based lending rates, which were later replaced by the repo-rate linked regime. While rate transmission is now considerably faster, particularly after the central bank raised the repo rate to 4% in response to difficulties created by the Coronavirus outbreak, some banks still refuse to pass on the gains to clients. 
• When choosing a lender, look into how quickly they have aligned their interest rates with the RBI's rates in the past. This is one approach to ensure that you will be able to benefit from policy changes during the life of your loan. 
• Is your lender dependable? 
• You must choose a lender with a reputable market reputation, just as you must choose a trustworthy builder when purchasing a home. When a developer fails, as in the situations of Amrapali, Jaypee, and Unitech, the customer is almost always the one who suffers.  
• The same might be said of his financial backer. If your bank is harmed as a result of any wrongdoings, the case will very certainly affect you as well. The recent debacle at the Punjab and Maharashtra Co-operative (PMC) Bank exemplifies this. 
• It's also crucial to learn about the lender's financial situation. Typically, these numbers are available in the public domain. 
• What kind of post-sale support does the bank provide? 

Buyers must also examine and analyze a bank based on its after-sales services, keeping in mind that your house loan application acceptance is only the beginning of a long-term relationship with the bank. 

• Carefully read the terms and conditions of your home loan. 
• Most banks nowadays guarantee that your home loan application will be approved promptly. In most situations, you may apply for a home loan online and submit all of your documentation, and the lender will disburse the funds within a week.  
• Even though this expedites the closing process for buyers, especially if they have already chosen property, it is not without its drawbacks. You may not read the terms and conditions attentively due to your impatience to acquire the loan as quickly as feasible.  
• Rushing into a house loan reduces your ability to shop around for a better deal. You may not read the terms and conditions attentively due to your impatience to acquire the loan as quickly as feasible. Rushing into a house loan reduces your ability to shop around for a better deal. 
• Even if the RBI has prohibited banks from charging a penalty for prepayment of a home loan, financial institutions are free to levy a penalty if the loan is based on a floating interest rate and you want to transfer the loan to another lender.  
• This is something you should discuss with the bank before taking out a loan. Because the loan agreement is susceptible to re-setting and the money market clause, the bank often reserves the right to adjust the rates later if the loan was taken at a fixed rate of interest. 
• How to Bargain When Getting a Mortgage? 
• You'd be amazed at the benefits you may gain from the bank by negotiating for your home loan, especially given that demand is low and financial institutions are prepared to be more accommodating.  
• You might be able to persuade the banks to waive some of the processing fees or other fees that they normally impose. A good credit score can also help you gain some interest rate relief on your home loan. 

Conclusion: 

To conclude, regardless of which lender you choose for a home loan, it is also advisable to thoroughly read and understand the lender’s discretion. In choosing the best home loan, Afinoz can help you as it offers a platform to compare and choose the lender based on your requirements. So, what are you waiting for apply for a home loan with Afinoz.