Looking to buy your dream home in 2025? Here’s a detailed breakdown of the top 10 banks offering the best home loans in terms of interest rates, fees, flexibility, and customer service.
1. State Bank of India (SBI)
- Interest Rate: 8.50–9.65% p.a.
- Processing Fee: 0.35–1% (₹2,000 min; ₹10,000 max + GST)
- Loan Tenure: Up to 30 years
Pros: High trust, flexible EMI options, pan-India presence
Cons: Slower processing time, higher upper interest rate range
2. HDFC Bank
- Interest Rate: 8.45–9.95% p.a.
- Processing Fee: Up to 0.5% (min ₹3,000 + GST)
- Loan Tenure: Up to 30 years
Pros: Excellent customer service, quick approvals
Cons: Slightly higher rates for self-employed
3. Bank of Baroda (BoB)
- Interest Rate: 8.15–8.50% p.a.
- Processing Fee: Up to 0.50% (₹8,500–₹25,000)
- Loan Tenure: Up to 30 years
Pros: Lower rates for women, repo-linked options
Cons: Documentation process may be lengthy
4. Punjab National Bank (PNB)
- Interest Rate: 8.05–8.65% p.a.
- Processing Fee: Around 0.35–0.50% (capped at ₹15,000)
- Loan Tenure: Up to 30 years
Pros: Affordable interest, government scheme tie-ins
Cons: Mixed reviews on service experience
5. Union Bank of India
- Interest Rate: 7.85–8.30% p.a.
- Processing Fee: Around 0.50% (₹15,000 cap)
- Loan Tenure: Up to 30 years
Pros: Among the lowest interest rates, reliable terms
Cons: Not as fast as private banks in disbursement
6. Canara Bank
- Interest Rate: 8.40–8.90% p.a.
- Processing Fee: Around 0.50% (₹1,500–₹10,000)
- Loan Tenure: Up to 30 years
Pros: Good rural reach, reasonable rate structure
Cons: Higher fees for smaller loans
7. Kotak Mahindra Bank
- Interest Rate: 8.45–8.75% p.a.
- Processing Fee: 0.5–1% (min ₹10,000)
- Loan Tenure: Up to 25 years
Pros: Fast processing, good for salaried borrowers
Cons: Shorter tenure and higher initial fees
8. Axis Bank
- Interest Rate: 8.60–8.75% p.a.
- Processing Fee: Up to 1% (capped at ₹10,000 + GST)
- Loan Tenure: Up to 30 years (floating), 20 years (fixed)
Pros: Variety of repayment options
Cons: Slightly higher fees, strict documentation
9. ICICI Bank / ICICI Home Finance
- Interest Rate: 8.75–9.25% p.a.
- Processing Fee: Around 0.5% (min ₹1,500 + GST)
- Loan Tenure: Up to 30 years
Pros: Quick application process, digital onboarding
Cons: Higher rates for non-salaried individuals
10. LIC Housing Finance
- Interest Rate: 8.50–9.25% p.a.
- Processing Fee: 0.25% (max ₹15,000 + GST)
- Loan Tenure: Up to 30 years
Pros: Competitive processing fee, home-loan focused
Cons: Fewer online features compared to private banks
RBI Repo Rate Update – June 2025
In 2025, RBI has reduced the repo rate twice, with the latest at 5.50%, resulting in lowered home loan interest rates across many public sector banks. Borrowers should choose repo-linked home loans to benefit from faster rate adjustments.
Summary Table
| Bank | Interest Rate | Processing Fee | Max Tenure |
| SBI | 8.50–9.65% | 0.35–1% | 30 years |
| HDFC Bank | 8.45–9.95% | Up to 0.5% | 30 years |
| Bank of Baroda | 8.15–8.50% | Up to 0.50% | 30 years |
| PNB | 8.05–8.65% | 0.35–0.50% | 30 years |
| Union Bank | 7.85–8.30% | 0.50% | 30 years |
| Canara Bank | 8.40–8.90% | 0.50% | 30 years |
| Kotak Mahindra Bank | 8.45–8.75% | 0.5–1% | 25 years |
| Axis Bank | 8.60–8.75% | Up to 1% | 30 years |
| ICICI Bank | 8.75–9.25% | ~0.5% | 30 years |
| LIC HFC | 8.50–9.25% | 0.25% (capped) | 30 years |
Tips for Borrowers in 2025
- Opt for Repo-Linked Rates: Benefit from faster reductions after RBI cuts.
- Compare APR (Effective Cost): Don’t just look at interest rates.
- Choose Based on Tenure: Go for longer tenure if you want lower EMIs.
- Check Prepayment Terms: Ensure there’s no penalty on early repayment.
Use EMI Calculators: Plan your finances ahead.