With Diwali approaching on 8 November, prospective homebuyers looking to turn the festive season into an opportunity to purchase their dream house may also be evaluating their financing options. While property developers are rolling out festive offers, home loan interest rates remain an important factor to consider before making a long-term financial commitment.
Home loan interest rates currently start at 7.25% per annum at some public sector banks. However, rates vary significantly across lenders, loan amounts and borrower profiles. Here is a look at the latest home loan interest rates across public sector banks, private banks and housing finance companies.
Home loan interest rates at public sector banks
Among public sector banks, Bank of Maharashtra and Central Bank of India offer the lowest starting interest rates at 7.25% per annum across all three loan categories in the latest comparison.
Bank of India and Indian Bank follow with starting rates of 7.35%, while Bank of Baroda, UCO Bank and Union Bank of India offer rates starting at 7.40%. State Bank of India (SBI) has a starting interest rate of 7.50%, with its published rate range extending up to 8.80%.
Public sector bank | Rate |
| Bank of Maharashtra | 7.25-9.90% |
| Central Bank of India | 7.25-9.40% |
| Bank of India | 7.35-10.50% |
| Bank of Baroda | 7.40-9.40% |
| State Bank of India | 7.50-8.80% |
| Source: Paisabazaar, rates as of 4 November 2026. | |
Home loan interest rates at private sector banks
Among private sector banks, HSBC offers home loans starting at 7.45% per annum across all three loan categories. Kotak Mahindra Bank follows with starting rates of 7.60%, while HDFC Bank offers rates starting at 8%.
Axis Bank’s rates start at 8%, while ICICI Bank offers home loans starting at 8.75%.
However, the difference between the starting and upper-end rates can be substantial. For instance, Bandhan Bank’s rates range from 8.80% to 13.77%, depending on the loan and borrower profile.
Private sector bank | Rate |
| HSBC Bank | 7.45% onwards |
| Kotak Mahindra Bank | 7.60% onwards |
| Federal Bank | 7.50-9.25% |
| HDFC Bank | 8% onwards |
| Axis Bank | 8-9.10% |
| Source: Paisabazaar, rates as of 4 November 2026. | |
Home loan interest rates at housing finance companies
Homebuyers can also compare rates offered by housing finance companies, which provide an alternative to traditional bank financing.
LIC Housing Finance offers the lowest starting rate among the listed HFCs at 7.40% per annum. Bajaj Housing Finance and ICICI Home Finance follow with starting rates of 7.50%.
Godrej Housing Finance offers rates starting at 7.65%, while Aditya Birla Capital’s rates start at 7.87%.
Housing finance company | Rate |
| LIC Housing Finance | 7.40% onwards |
| Bajaj Housing Finance | 7.50% onwards |
| ICICI Home Finance | 7.50% onwards |
| Godrej Housing Finance | 7.65% onwards |
| Aditya Birla Capital | 7.87% onwards |
| Source: Paisabazaar, rates as of 4 November 2026. | |
What should homebuyers check before taking a loan this Diwali?
While festive offers can make home purchases attractive, borrowers should evaluate the complete cost of financing before signing a loan agreement.
Credit score and eligibility: Lenders consider credit scores, income, existing liabilities and repayment history while deciding the applicable interest rate. The lowest advertised rate may be available only to borrowers meeting specific eligibility conditions.
Processing fees and additional charges: A lender offering a slightly higher interest rate but waiving processing fees may not necessarily be cheaper over the long term. Compare processing charges, legal and valuation fees, and other applicable costs.
Floating versus fixed interest rates: Most home loans are linked to external benchmarks, which means the applicable interest rate and EMI can change when the benchmark rate changes. Borrowers should understand how their lender handles rate revisions.
Down payment and emergency savings: Do not exhaust your savings to maximise the down payment. Homebuyers should account for stamp duty, registration, interiors and moving expenses, while retaining sufficient emergency savings.
For those planning to purchase a home this Diwali, festive discounts and attractive home loan rates can provide an opportunity to compare financing options. However, the decision should ultimately depend on affordability, the property’s suitability and the total borrowing cost rather than the auspicious timing of the purchase.
