2 min
28 May 2026

The cost of borrowing through a home loan in India is shaped by several important factors. With the Reserve Bank of India announcing multiple repo rate cuts recently, many banks and lenders are now offering home loans at lower rates, making affordable housing financing a real possibility.

For instance, Bajaj Finserv home loan interest rates are influenced by details such as your credit history, CIBIL Score, monthly income, and proof of employment. A strong repayment track record and steady earnings often help borrowers secure better rates, while weaker financial indicators can result in higher borrowing costs.

Current home loan interest rates start at 7.25% p.a.*

Bajaj Finserv offers affordable home loan interest rates starting at just 7.25% p.a.* for salaried individuals. For self-employed applicants, the current interest rate begins at 7.70% p.a.* You can also benefit from a high loan sanction of up to Rs. 15 Crore*, with minimal documentation, fast processing, and instant approval.

Home loan interest rates for salaried employees starting at just 7.25%* p.a.

Salaried borrowers can enjoy attractive and lowest home loan interest rate starting at just 7.25%* p.a., along with flexible tenure and minimal processing fees. Check out the complete rate overview below:

Home loan interest rate (Floating) for salaried borrowers

Loan Type

Effective ROI (p.a.)

Home Loan

7.25%* to 10.25%*

Home Loan Balance Transfer

7.30%* to 10.35%*

Top-up

8.30%* to 10.40%*


Home loan rate of interest for professional borrowers starting at 7.30%* p.a.

Refer to the table below for the latest floating interest rates applicable to professional borrowers on housing loan, home loan balance transfer, and top-up loan options:

Home loan interest rate (Floating) for professional borrowers

Loan Type

Effective ROI (p.a.)

Home Loan

7.30%* to 10.30%*

Home Loan Balance Transfer

7.35%* to 10.40%*

Top-up

8.40%* to 10.45%*


Home loan interest Rates for self-employed borrowers starting at 7.70%* p.a.

Looking for the best home loan interest rate in India? Self-employed borrowers can avail attractive floating rates starting at 7.70%* p.a. Refer to the table below for the latest rates on Home Loan, Home Loan Balance Transfer, and Top-up Loan.

Home loan interest rate (floating) for self-employed borrowers

Loan Type

Effective ROI (p.a.)

Home Loan

7.70%* to 10.65%*

Home Loan Balance Transfer

7.95%* to 10.80%*

Top-up

9.20%* to 10.85%*


Home loan interest rates by credit score

Get home loan rates based on your credit score, with personalised options designed to match your financial needs.

Credit score

Salaried customers

Self-employed customers

800

7.25%* to 20%* p.a.

7.85%* to 17.00%* p.a.

750 – 800

7.25%* to 20%* p.a.

7.85%* to 17.00%* p.a.


How the RBI repo rate impacts your home loan interest rate in 2026

As of June 2026, the RBI repo rate stands at 5.25%, following a 25 basis point cut in December 2025. This reduction has led to lower floating home loan interest rates (commonly 7.60%-9.80% range), reducing EMIs for borrowers linked to external benchmarks. Most new loans are Repo Linked Loan Rate (RLLR) based.

Key takeaways

  • Current Repo Rate: 5.25% (down from 5.50% in mid-2025)
  • Home Loan Impact: Lower repo rates reduce interest burdens for borrowers on floating rates, generally reducing EMIs.
  • Repo-Linked Rates (RLLR): Banks (e.g. Central Bank of India) set rates as Repo Rate + Spread (e.g., 5.25% + 3% = 8.25%).
  • Typical Interest Rates: Rates often start around 7.60%–8.50% p.a. for good credit scores.
  • Fixed vs. Floating: Fixed rates remain unaffected by immediate repo changes, while floating rates fluctuate with RBI policy.

Impact on your home loan

  • EMI Adjustments: When the repo rate falls, your lender is expected to pass on benefits, reducing your monthly payments.
  • Transmission Time: Banks typically take a few weeks to a few months to reset interest rates after a repo rate change.
  • Interest Rate Composition: Your total home loan rate is Repo Rate + Bank's Spread/Margin.

Other charges applicable on home loans

Besides the regular EMIs and interest, several other charges apply to home loans. It's crucial to be aware of these costs to avoid unexpected financial burdens during the home loan journey.

Type of fee

Applicable charges

Processing fees

Up to 4% of the loan amount + GST as applicable

Penal charge

Click here to know about the penal charges.


Planning your home purchase budget involves factoring in all associated costs, not just the property price. To ensure you secure the best possible terms and rates for your home financing needs, check your loan offers with Bajaj Finserv. You may already be eligible, find out by entering your mobile number and OTP.

Home loan EMI bounce charges

Bounced home loan EMI charges in India generally consist of a flat penalty fee, late payment interest, and GST. These charges apply when an EMI fails due to insufficient funds, technical issues, or incorrect bank details.

Loan amount

Charges

Up to Rs. 15 lakh

Rs. 500

More than Rs. 15 lakh and up to Rs. 30 lakh

Rs. 500

More than Rs.30 lakh and up to Rs. 50 lakh

Rs. 1,000

More than Rs.50 lakh and up to Rs. 1 crore

Rs. 1,000

More than Rs.1 crore and up to Rs. 5 crore

Rs. 3,000

More than Rs. 5 crore and up to Rs. 10 crore

Rs. 3,000

More than Rs. 10 crore

Rs. 10,000

How do lenders decide the home loan interest rate?

Lenders consider a range of factors to assess the risk involved in lending your money for a home and, consequently, set your interest rate. Here are the key factors that affect home loan interest rate and EMI:

1. External economic and regulatory factors

  • RBI’s repo rate:
    If the Reserve Bank of India increases or decreases the repo rate (the rate at which it lends to banks), lenders often adjust home loan rates accordingly.

  • Inflation and economic conditions:
    Higher inflation usually pushes interest rates up to control money supply.

  • Market competition:
    Lenders may offer lower rates to stay competitive.

2. Loan-linked factors

  • Type of Interest Rate:

    • Floating rate (linked to benchmark rates like the RBI’s repo rate) changes over time.

    • Fixed rate remains constant for a set period.

  • Loan amount and tenure:
    Larger loans or very long tenures can sometimes have higher rates because they pose more risk.

  • Loan-to-Value (LTV) ratio:
    If you’re borrowing a high percentage of the property’s value, the rate may be higher due to increased lender risk.

3. Borrower’s profile

  • Credit score (CIBIL Score):
    A score above ~750 usually gets you better rates. Lower scores = higher risk = higher rates.

  • Income and job stability:
    Stable income from a reputed employer or government sector generally attracts lower rates.

  • Age and employment type:
    Younger borrowers with more earning years ahead can be seen as lower risk.

4. Property-related factors

  • Property location and type:
    Well-located, in-demand properties may get lower rates since they’re easier to resell if needed.

  • Builder’s profile:
    Projects by reputed builders may be considered safer by lenders.

5. Special schemes and offers

  • Women borrower benefits:
    Many lenders offer 0.05%–0.1% lower rates for women co-applicants.
  • Festive offers and tie-ups:
    Banks often run seasonal discounts or tie-ups with developers.

6. RBI Repo Rate Impact

  • Cost of Funds: When the RBI increases the repo rate, it becomes more expensive for banks to borrow money, prompting them to increase home loan rates.
  • Transmission: Banks often link home loans to an External Benchmark Lending Rate (EBLR), which directly reflects changes in the repo rate, meaning EMI adjustments can occur quickly when the repo rate changes.
  • Rate Reduction: Conversely, a lower repo rate allows banks to reduce their cost of funds, allowing them to pass on benefits to customers through lower rates.

7. Repayment History Impact

  • Creditworthiness Assessment: Lenders review your credit report and past repayment behaviour to calculate risk.
  • Lower Rates for Good History: Consistent, timely repayment of past loans and credit cards indicates financial discipline, often making borrowers eligible for lower interest rates.
  • Higher Rates for Poor History: A history of missed or delayed payments suggests high risk, which leads lenders to either charge higher interest rates to mitigate that risk or potentially reject the loan application.

Which type of housing loan interest rate should you choose in 2026?

When selecting a home loan in 2026, one of the most important decisions you will make is choosing between a fixed and a floating interest rate. Your choice should depend on your income stability, comfort with market changes, and long-term financial plans.

Interest rate type

Who it suits

Key points to consider

Fixed interest rate

Suitable for borrowers who prefer certainty and stable monthly outgoings

The interest rate remains unchanged for a set period, so your EMI stays the same. This helps with budgeting. However, if market rates fall, you may continue paying a higher rate.

Floating interest rate

Suitable for borrowers who are comfortable with changing EMIs

The rate moves in line with market conditions. If rates drop, your EMI or tenure may reduce. If rates rise, your loan cost may increase over time.


In simple terms, if you want predictable payments and peace of mind, a fixed rate can be a safer choice. If you are willing to take some risk in exchange for possible savings, a floating rate may work better. Before deciding, review current lending trends, compare offers carefully, and ensure your selection supports your long-term financial goals.

How to avail of Bajaj Finserv's low-interest home loans in India

Getting a home loan at a competitive rate depends on your income, credit profile, loan amount, and repayment plan. With careful planning and the right approach, you can improve your chances of securing a lower interest rate from Bajaj Finserv and make your home purchase more affordable.

Tip

What it means

How it helps reduce interest

Pay a higher down payment

Contribute a larger portion of the property cost upfront so the required loan amount is lower. Loans up to around Rs. 35 lakh may attract more favourable rates compared to higher amounts.

A smaller loan reduces the lender’s risk, which can help you qualify for a better interest rate and lower overall interest outgo.

Choose a suitable tenure

Select a repayment period that fits your financial capacity. Longer tenures, often above 15–20 years, can lower your EMI burden.

Lower EMIs improve repayment comfort and stability, which can positively influence loan approval terms.

Select the right interest type

Understand the difference between fixed and floating rates before applying. Floating rates change with market conditions, while fixed rates remain constant for a set period.

Choosing a structure that suits your financial plans can help you manage costs effectively over time.

Maintain stable income

Ensure the applicant has a steady and sufficient income, ideally from a recognised organisation or established business.

A stable income profile increases lender confidence, which may result in more competitive interest rates.

Improve your credit score

Aim for a credit score of 750 or above by clearing dues on time and reducing existing liabilities.

A strong credit profile shows responsible borrowing behaviour and can help you secure lower rates.

Add a female applicant

Consider applying with a woman as the primary or co-applicant, if eligible.

Many lenders offer slight interest concessions to women borrowers, which can reduce overall loan cost.

Opt for a balance transfer

Transfer your existing home loan to Bajaj Finserv if they offer better terms than your current lender.

This can help you benefit from a lower interest rate and reduce your total repayment amount during the remaining tenure.

Check for special offers

Look for festive deals, limited-period schemes, or promotional benefits when applying.

Such offers may include reduced interest rates or processing fee benefits, helping you save more over the loan term.


Simplify home loan planning with an online EMI calculator

A home loan is a major financial commitment, but with proper planning, you can manage your repayments better and even save on interest. A home loan EMI calculator makes this easier by giving you quick and accurate estimates.

To get started, simply enter your:

  • Loan amount
  • Interest rate
  • Loan tenure

Use our online Home Loan EMI Calculator to save time and plan your finances with confidence.

Once you have calculated your potential EMI and determined your budget, the next step is securing competitive financing for your home purchase. With Bajaj Finserv offering loans up to Rs. 15 Crore* with attractive interest rates, check your eligibility for a home loan from Bajaj Finserv. You may already be eligible, find out by entering your mobile number and OTP.

How to Calculate Home Loan Interest Rate

Home loan interest is calculated using the formula:

EMI = [P × R × (1 + R)^N] ÷ [(1 + R)^N – 1]

Where:

  • P is the principal amount
  • R is the monthly interest rate
  • N is the tenure in months

It is usually calculated on a monthly reducing balance, meaning interest decreases as the principal is repaid.

Key Components for Calculation

To calculate the interest, you need three key figures:

  • P (Principal Amount): The total loan amount borrowed.
  • R (Monthly Interest Rate): Annual rate ÷ 12 ÷ 100 (e.g., 8.4% p.a. becomes 8.4 ÷ 1200 = 0.007).
  • N (Loan Tenure): Total number of months (e.g., 20 years = 240 months).

Step-by-Step Calculation Formula

  1. Calculate Monthly Interest Rate (R): Divide the annual interest rate by 12 and then by 100.
  2. Calculate Total Months (N): Multiply the loan tenure in years by 12.
  3. Apply Formula: Plug P, R, and N into: EMI = [P × R × (1 + R)^N] ÷ [(1 + R)^N – 1]
  4. Find Total Interest:
    • Total Payment = EMI × N
    • Total Interest = Total Payment – Principal Amount

Example Calculation

  • Loan Amount (P): Rs. 10,00,00
  • Annual Interest Rate: 8.5%
  • Tenure: 15 years
  • Monthly Rate (R): 8.5 ÷ 12 ÷ 100 = 0.00708
  • Months (N): 15 × 12 = 180
  • EMI: Rs. 38,951 (approx)
  • Total Interest: (Rs. 38,951 × 180) – Rs. 10,00,000 = Rs. 30,13,180

Home loan options for different budgets

Rs. 30 Lakh Home Loan

Rs. 20 Lakh Home Loan

Rs. 40 Lakh Home Loan

Rs. 60 Lakh Home Loan

Rs. 50 Lakh Home Loan

Rs. 15 Lakh Home Loan

Rs. 25 Lakh Home Loan

Rs. 1 Crore Lakh Home Loan

Rs. 10 Lakh Home Loan


Home loans designed for different professionals

Home Loan for Self Employed

Home Loan for Doctors

Home Loan for Private Employees

Home Loan for Salaried Employees

Home Loan for Government Employees

Home Loan for Bank Employees

Home Loan for Advocates

 

 


Home loan calculators

Home Loan EMI Calculator

Home Loan Tax Benefit Calculator

Home Loan Eligibility Calculator

Home Loan Prepayment Calculator

Stamp Duty Calculator

Income Tax Calculator


Home loans in different cities

Home Loan in Mumbai

Home Loan in Delhi

Home Loan in Bangalore

Home Loan in Hyderabad

Home Loan in Chennai

Home Loan in Pune

Home Loan in Kerala

Home Loan in Noida

Home Loan in Ahmedabad

Frequently asked questions

How much interest for a Rs. 20 lakh home loan?

The total interest you will pay on a Rs. 20 lakh home loan depends on the rate of interest and the repayment period you choose. As an example, at 7.45% per year over 20 years, your EMI could be around Rs. 16,051. Over the full tenure, the total interest payable would be roughly Rs. 18,52,185, bringing the overall repayment (principal plus interest) to about Rs. 38,52,185.

What will be EMI for a Rs. 40 lakh home loan?

The EMI for a Rs. 40 lakh home loan is linked directly to your loan tenure and the interest rate charged by the lender. For example, if the loan is taken at 7.45% interest over 20 years, the EMI would be about Rs. 32,102. However, with the same rate over just 10 years, the EMI could rise to nearly Rs. 47,376. Using an EMI calculator gives you a personalised and accurate estimate.

How much interest on a Rs. 15 lakh home loan?

The interest on a Rs. 15 lakh home loan varies depending on the loan tenure and rate of interest applied. For example, a 10-year tenure at 7.45% may lead to about Rs. 6,31,937 in total interest. If you choose a 20-year tenure at 7.50%, the interest payable increases substantially. To get an exact figure based on your borrowing, it is best to use a home loan EMI calculator.

What does a hike in home loan interest rates mean for customers?

When lenders increase home loan interest rates, the cost of borrowing rises. This means higher EMIs and a bigger overall repayment burden for customers. Even a small hike can make a noticeable difference, especially for those with long tenures. The actual impact depends on your credit score, income profile, and the terms of your loan. For borrowers, this can reduce affordability and increase financial pressure over time.

During periods of rising rates, it becomes even more important to secure the best possible terms from a reliable lender. If you are considering a home loan, check your eligibility for competitive rates with Bajaj Finserv. You may already be eligible, find out by entering your mobile number and OTP.

How to calculate home loan interest rate?

To calculate your home loan interest, start by dividing the annual interest rate by 12 to get the monthly rate. Then apply the EMI formula: EMI = [P × R × (1+R)^N] ÷ [(1+R)^N – 1], where P is the principal, R the monthly rate, and N the number of months. Once you know the EMI, multiply it by the number of instalments and subtract the principal to arrive at the total interest payable.

What are types of interest rates for home loans?

Home loan interest rates usually come in three main forms: Fixed, Floating, and Hybrid. Fixed rates remain unchanged throughout the tenure, offering stability in repayments. Floating rates change depending on market conditions and may go up or down. Hybrid loans give you both—starting with a fixed rate for a few years, then switching to a floating rate. Each option has its own advantages depending on your financial priorities.

What is a floating interest rate on a home loan?

A floating interest rate is one that changes in line with market conditions and the lender’s benchmark rate, such as the repo rate or MCLR. As a result, your EMI can increase when rates go up and decrease if rates fall. This type of rate gives you the chance to benefit when lending rates drop, but it also carries the risk of higher payments if market rates rise in the future.

How to reduce existing home loan interest rate?

There are several ways to lower the interest rate on your current home loan. You can request your lender for a reduction, especially if you have a good repayment record and high credit score. Alternatively, you can transfer your loan balance to another bank offering a lower rate. Making partial prepayments whenever possible also reduces the outstanding principal, which in turn decreases the overall interest cost across the loan tenure.

If you are currently paying higher interest rates on your existing home loan, exploring balance transfer options could help you save significantly. With Bajaj Finserv offering competitive rates for balance transfers plus top-up facilities, check your loan offers for potential savings. You may already be eligible, find out by entering your mobile number and OTP.

What is a fixed interest rate on a home loan?

A fixed interest rate is one that remains unchanged for the entire duration of your home loan. This means your EMI stays constant, giving you predictable monthly expenses and protection from rising market rates. However, fixed-rate loans may start off slightly higher compared to floating rates, and you won’t benefit if market rates drop. It is most suitable for borrowers who prefer certainty and long-term stability in their finances.

What is the home loan interest rate today?

Home loan interest rates in 2026 generally start from around 7.25% p.a. for eligible salaried borrowers, depending on the lender, credit profile, and loan amount. Rates for balance transfer and top-up loans may differ slightly. The final interest rate offered to a borrower depends on factors such as CIBIL Score, repayment history, income stability, property details, and loan tenure. Comparing different lenders can help borrowers find suitable and affordable loan options.

Will home loan interest rates go down in future?

Home loan interest rates may reduce in the future if the Reserve Bank of India lowers the repo rate or if market conditions improve. Changes in inflation, economic growth, and banking competition also influence lending rates. However, future rate movements cannot be guaranteed because they depend on several economic factors. Borrowers with floating-rate loans may benefit more quickly from rate cuts, while fixed-rate loans generally remain unchanged during the agreed period.

How to repay a 20-year home loan in 10 years?

You can reduce your home loan tenure by increasing your EMI amount, making regular part-prepayments, or using annual bonuses and extra income to reduce the principal balance. Choosing a shorter tenure during loan restructuring may also help. Even small additional payments can significantly reduce interest costs over time. Maintaining financial discipline and avoiding missed EMIs can help borrowers repay a long-term home loan much faster than the original schedule.

Will home loan rates decrease after RBI repo rate cut?

Home loan rates may decrease after the RBI cuts the repo rate, especially for floating-rate loans linked to external benchmark rates. Banks and financial institutions usually revise lending rates after such announcements, although the change may not happen immediately. Some lenders may take a few weeks or months to pass on the benefit. Fixed-rate home loans generally remain unaffected by repo rate changes during the fixed-interest period.

How does CIBIL Score affect home loan rate?

A good CIBIL Score shows lenders that you are financially responsible and capable of repaying loans on time. Borrowers with scores above 750 are usually offered lower home loan interest rates because they are considered lower risk. A low score may result in higher interest rates, stricter eligibility checks, or even loan rejection. Paying EMIs and credit card bills on time can help improve your CIBIL Score over time.

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Bajaj Finance app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finance App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finance App to:

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