Home Loan Interest Rate in 2023 - Check Latest Interest Rate

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Current Home Loan Interest Rate

Kotak Mahindra Bank offers attractive home loan interest rates in India starting at 8.70% p.a. This lending rate allows you to repay your home loan comfortably at EMI of ₹819/lakh. To get more information on housing loan rates for salaried and self-employed borrowers, kindly refer to the below table:

Customer Type	Effective Rate Of Interest
Floating Category (Repo Rate: 6.50%)
For Salaried	8.70% onwards
For Self-employed	8.75% onwards

Connect with us to know more about current home loan interest rates and check out low-interest home loans available to you.

How to Calculate Interest on Home Loan?

An error-free and easy way to calculate home loan interest rates and EMIs on a home loan is by the Kotak Home Loan EMI Calculator. Just enter the amount you want to borrow, the tenure you want, and the rate of interest you prefer.
For manually calculating housing loan interest, you can use a mathematical formula:

Formula: EMI = [P x r x (1+r)^n]/[(1+r)^n-1], where P, R, and N are the variables. The EMI value will change each time you change any of the three variables. This way, you can calculate the home loan interest you’ll need to pay.

P = Principal Amount, R = Rate of Interest and N = Number of times interest is compounded per year.

Types of Home Loan Interest Rates

Home loan interest rates in India can be fixed or floating. Find out what this means and how these two types of house loan interest rates differ from one another.

Floating Interest Rate

This is another popular type of home loan interest rate today in India. Floating house loan nterest rates follow the prevalent market rates. When the interest rate drops, your home loan EMI also drops.

Benefits Floating Home Loan Rates

Lower Interest Rates : Floating home loan rates are typically 1% to 2.5% lower than fixed rates (from the same lender). This can help you save money each month on EMIs.
The Possibility for Greater Gains : Borrowers can stand to gain unexpected gains: Borrowers who choose the floating interest rate can benefit from market fluctuations. If the market rates go below the base rate, there will be an even lower home loan rate for the corresponding period.

Setbacks of Floating Home Loan Rates

If the market rates go above the base rate, the borrowers will lose their current home loan interest rates and have to pay a higher interest amount.
The increase in housing loan interest rate may make monthly payments quite steep—even perhaps to the point of becoming unmanageable.
Budgeting cash flow and calculating the long-term costs of borrowing with floating house loan rates is not possible.

Fixed Interest Rate

This type of housing loan interest rate remains constant for the complete tenure of the loan. Fixed home loan rates are set and not subject to change owing to market fluctuations. Also, for certain cases, after paying a fixed housing loan interest rate for a certain time period, it may be possible to convert it into a floating housing loan interest rate depending on loan terms.

Benefits of Fixed Home Loan Interest Rates

The biggest benefit of fixed house loan interest rates is that borrowers know exactly how much they have to pay. Even if the market fluctuates and makes house loan interest rates higher, your set interest remains unaffected.
With fixed home loan interest rates, borrowers know exactly how much they need to budget for, and can align their finances well in advance to pay off their loan.

Setbacks

The flipside of fixed house loan interest rates is that even when the home loan interest rates in India drop, the agreed rate remains the same. Borrowers cannot benefit from lower interest rates on their home loans.
When compared to floating interest rates, fixed home loan rates tend to be higher by about 1-2.5%.

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Disclaimer (Things you should know):

For loans: Credit at the sole discretion of the Bank and subject to guidelines issued by RBI from time to time. Bank may engage the services of marketing agents for the purpose of sourcing loan assets.

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