Synopsis: This article covers the top banks and housing finance companies in India that provide the lowest interest rates on housing loans as of February 2026. It also explains the factors that influence the home loan interest rates and how they affect interest rates.
According to the Economic Survey 2025-26, Outstanding individual home loans in India have increased to ₹37 lakh crore, showing a 4x increase over the past decade. This highlights the growing reliance on formal sources of housing credit as well. Formal lenders such as public sector banks, private sector banks and housing finance companies are providing competitive interest rates for home loans.
Types of Home Loan Interest Rates
1. Floating Interest Rate: Floating interest rates are variable, and it moves according to market interest rates. Therefore, these interest rates may keep fluctuating throughout the loan tenure, and EMIs will change accordingly.
2. Fixed Interest Rate: These interest rates remain constant throughout the loan tenure, no matter how the market interest rate changes. Changes in the market interest rate will not affect this interest rate, and hence, it is often preferred by many. Under fixed interest rate loans, EMIs will remain constant and predictable.
3. Hybrid Interest Rate: This type of interest rate is a mix of both a floating interest rate and a fixed interest rate. Initially, the interest rates will be fixed for a certain period, later they’ll change according to the market interest rate.
What Influences Home Loan Interest Rates
Credit Profile of the Borrower: If the credit score is more than 750, it shows that the borrower has a great credit history; therefore, they often get a loan at low interest rates. If the credit score is below 700, it’s a sign that the borrower has poor credit history, and this leads to high interest rates for a loan. Timely repayment of EMIs, low credit card utilisation, and limited loan enquiries help in maintaining a strong credit score.
Loan Amount and LTV Ratio: The LTV ratio shows the percentage of the property value financed by the bank. A low LTV ratio attracts a low interest rate because the bank is contributing a low amount, and the borrower is contributing a high down payment. As the lender’s risk is low, loans are provided at low interest rates.
Status of the Property: For ready-to-move-in properties, the interest rates are lower as the risk of construction delays and other legal issues is low. Properties that are near completion attract moderate interest rates, and properties with ongoing construction carry higher interest rates due to the risks associated.
Income Profile and Employment Stability: Salaried individuals working at reputed organisations with stable income and employment are often provided loans at low interest rates, as they have low chances of default in repayment. On the other hand, self- employed borrowers, or those with inconsistent income, may face higher interest rates.
Bank Policies and Market Conditions: The interest rate is also influenced by price adjustments made by the bank based on internal policies, promotional offers, and revisions in the repo rate. Changes in the RBI repo rate directly affect floating interest rates.
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Top Banks and HFCs with Lowest Home Loan Interest Rates in February 2026
| Name of Lender | Interest Rates# |
| Bank of India | 7.10% p.a |
| Bajaj Housing Finance | 7.15% p.a |
| Canara Bank | 7.15% p.a |
| HDFC Bank | 7.20% p.a |
| HDFC Sales | 7.20% p.a |
| Punjab National Bank | 7.20% p.a |
| State Bank of India | 7.25% p.a |
| Punjab & Sind Bank | 7.30% p.a |
| IDBI Bank | 7.35% p.a |
| ICICI Bank | 7.45% p.a |
| PNB Housing Finance | 7.50% p.a |
| Tata Capital Housing Finance | 7.50% p.a |
| Godrej Housing Finance | 7.60% p.a |
| L&T Finance Limited | 7.65% p.a |
| Axis Bank | 8.00% p.a |
| Home First Finance | 8.00% p.a |
| Jio Housing Finance | 8.20% p.a |
| RBL Bank | 8.20% p.a |
| India Shelter Home Loan | 8.43% p.a |
| Federal Bank | 8.75% p.a |
| Samman Capital | 8.75% p.a |
| IDFC First Bank | 8.85% p.a |
| Easy Home Finance | 8.99% p.a |
| Piramal Capital Housing Finance | 9.99% p.a |
| Shubham Housing Finance | 10.45% p.a |
Disclaimer: Interest rates mentioned are indicative and based on publicly available information at the time of writing. Actual rates may vary depending on borrower profile and lender policies. Please verify the latest terms with the respective bank or financial institution before making any decision.
Conclusion
In February 2026, interest rates for home loans in India lie between 7-10.45%. The lowest interest rate is at 7.10% p.a by the Bank of India, and the highest rate is 10.45% p.a. for home loans by Shubham Housing Finance. However, keep in mind that the final interest rate offered to a borrower varies and depends on factors like their credit score, property status, income, employment stability, and market conditions.
Written by Nila Maria Jacob
