New Delhi: Purchasing a house is often the most significant financial decision for many individuals. A home loan involves borrowing money from banks or other lending institutions. Typically, borrowers repay the loan amount along with interest over a period ranging from 10 to 30 years through Easy Monthly Installments (EMIs). Besides the loan itself, additional expenses are incurred when buying a home. Banks usually do not finance the entire house cost. They provide loan as per the Loan to Value Ratio (LTV) set by the Reserve Bank, which determines the percentage of the property price eligible for a loan.

In addition to the LTV ratio, several factors influence loan approvals, such as the borrower’s income, repayment capacity, age, job stability, and credit score.

Now, let’s examine the home loan interest rates offered by ICICI Bank, HDFC Bank, and Axis Bank.

ICICI Bank home loan interest rate

ICICI Bank offers home loans with interest rates ranging from 8.40% to 9.45%. The processing fee is up to 1.00% of the loan amount, plus GST.

HDFC Bank home loan interest rate

HDFC Bank provides home loans at interest rates between 8.60% and 9.50%. The processing fee is up to 0.50% of the loan amount or INR 3,000, whichever is higher, plus applicable taxes.

Axis Bank home loan interest rate

Axis Bank’s Home Loan interest rates start from 8.75% for salaried and 9.10% for self-employed individuals. The processing fee is up to 1% of the loan amount, with a minimum of INR 10,000, along with an upfront processing fee of INR 2,500 plus GST.

Home loan Tax Benefits

Income Tax benefits are available on your home loan. You can claim deduction on the interest paid under section 24(b) of the Income Tax Act. Additionally, you can avail deduction on the principal repayment of the home loan under Section 80C of the Income Tax Act. This deduction becomes applicable after the construction of the residential property is completed. However, if the property is sold within 5 years of possession, this benefit will be reversed.

Moreover, interest paid on a home loan qualifies for deduction under Section 24(b) of the Income Tax Act. For a self-occupied property, a maximum deduction of Rs 2 lakh annually is allowed from gross income, provided the construction or acquisition of the property is completed within 5 years.