Even though choosing the right bank to procure a home loan from is one of the most crucial decisions of the home buying process, it is never talked about or discussed in detail. On one hand, financial considerations are given a lot of importance and on the other hand, home loan options are often neglected. We are here to change the narrative and provide you with all that is needed to make an informed decision.
No matter how much loan you want or when you plan to pay it back, it all comes down to the bank that you decide to get it from. Did you know that the cost-effectiveness of your loan solely depends on the bank that provides you with the loan? So now you know that the pressure is on!
Even right at this moment, there are a countless number of banks competing with one another to get a competitive advantage over the home loans that they offer. A lot of first-time homebuyers trust the reputation of the bank, instead of reading through and researching the terms and conditions that they imply on their home loan schemes. While reputation is a factor to consider too, it is more important to know the benefits and drawbacks that banks offer when it specifically comes to giving out home loans.
Most banks upgraded their home loan schemes during the end-year festive season in 2021. This benefited the buyers who purchased homes during the end-year sale but left those confused who want to start their home buying journey in 2022.
To clear this confusion, given below is a list of banks that offer home loans and are the best option that you have in 2022. For your benefit, we have also included the home interest rate that these banks offer for both self-employed and salaried individuals.
Also Read: Factors For Choosing Home Loan Bank
Best Home Loan Banks in 2022
ICICI Bank
This bank is considered the very best for home loans not only in 2022 but for decades now. Did you know that it has around 5,288 subsidiaries all across India? The bank is extremely customer-friendly. It is always open to answering queries and spending one on one time with probable customers as well. All employees are highly qualified and maintain a degree of professionalism, carrying out tasks effortlessly. The affordability fee as of 2022 is 0.50% (out of the total home loan amount) The bank has a maximum tenure of 30 years, and the affordability scale is high.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 7.40% | 6.70% |
| Self Employed Individual | 7.55% | 6.80% |
Kotak Mahindra Bank `
This private lender is growing fast in India and has about 100 branches all across the country. Kotak Digi House Loan option will empower you to get an instant approval for the home loan. The bank announced last year that housing finance is their top priority and they will continue to introduce schemes and leverages even in 2022. A drawback of the bank is that you have to make a lot of visits to the nearest branch whenever you have a concern or are waiting for approval on the home loan. The affordability fee is close to none right now - just 0.5 to 1%. The bank has a maximum tenure of 30 years, and the affordability scale is high.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 7.10% | 6.55% |
| Self Employed Individual | 7.45% | 6.55% |
State Bank of India (SBI)
The bank has assisted more than 30 lakh families with home loans as of 2021. It is also considered a major player in the real estate market. With strong financial health and trustworthy employees, home buyers take loans from SBI primarily because of the reliability factor. Whenever RBI announces a lower repo rate, SBI is the first to always reduce its interest rates for the sake of its customers. A drawback is that the bank asks for an unusually high number of documents for verification. It takes a lot of time for them to confirm whether you are eligible for the loan or if there is a need for some extra documents too. The longest tenure for SBI is 30 years, and their processing fee is 0.40%.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 7.05% | 6.7% |
| Self Employed Individual | 7.05% | 6.7% |
HDFC Bank
For your clarity - HDFC and HDFC Bank are two different banks. While both of them are a part of the HDFC Group, they are quite different from one another. HDFC offers a variety of benefits to its home loan-seeking customers, most benefits unique from what other banks offer. The customers in the eyes of the bank are their extended family and they go way and beyond to provide them with what they require. The maximum tenure for HDFC is 30years, and the affordability scale is high.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 7.40% | 6.7% |
| Self Employed Individual | 7.85% | 6.7% |
Union Bank of India
Union Bank of India has just recently gained the importance that it deserved. You must have heard or seen the bank becoming significant from the year 2020. The reason for the press's attention on the bank was due to its merger with Andhra Bank and Corporation Bank. Union Bank imposes no cap on any amount of home loan. Its processing fee is 0.50, along with GST rates. Since the Union Bank does not have too many branches spread across India, it may be a drawback.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 7.0% | 6.40% |
| Self Employed Individual | 6.80% | 6.45% |
Bank of Baroda
With more than 10,000 branches in both India and Abroad, Bank of Baroda experienced a major transformation after merging with Dena Bank and Vijaya Bank a few years back. Instead of a tedious and time taking home loan process as is the case with all the other banks, Bank of Baroda offers a seamless and quick loan approval process. They give their customers an option of either doing everything online from the comfort of their home or visiting the bank for assistance.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 8.75% | 6.5% |
| Self Employed Individual | 8.75% | 6.5% |
Also Read: Difference Between Home Loan vs Land Loan
Punjab National Bank (PNB)
Right at this moment, PNB is offering several affordable home loan deals to its new and existing customers. Currently, it has a total of about 80 million loyal customers who plan to stay with them long term. It rewards customers who have high credit scores and offers a wide variety of extra benefits. On the downside, it has come to notice that a lot of customers are not satisfied with their experience as PNB might be less customer-friendly when it comes to assisting and helping with queries. It charges no processing fee at the moment.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 7.35% | 6.50% |
| Self Employed Individual | 7.35% | 6.55% |
Axis Bank
Every customer is assigned a personal agent to assist them with the home loan process. These agents are not only extremely friendly, but they are always available to cater to your doubts and concerns. You can trust Axis Bank to provide you with the best interest rates.
Most of the customers have a hard time figuring out the interest rates for this specific bank. We have found them for you and they are listed below. At least you can strike this task off of your to-do checklist!
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 8.40% | 6.90% |
| Self Employed Individual | 8.55% | 7 % |
Canara Bank
They are known for their highly affordable interest rates. This is the perfect bank for you if you fall under the middle age bracket. Canara Bank allows its customers to repay loans up till the age of 75 years, and so you might find its other terms and conditions suitable too. Canara Bank charges a processing fee of 0.50% and is rated average on the affordability scale.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 8.90% | 8.90% |
| Self Employed Individual | 6.90% | 6.90% |
LIC Housing Finance
This bank is majorly known for assisting customers with finance-related issues in terms of repairing and renovating properties. It takes the customers through the entire loan process and helps them navigate better. LIC has approved about 3.35 lakh home loans to date, and is willing to give its customers a maximum of 90% of the property value as a home loan! Even though it is not as reputed as other brands, LIC is slowly making its name in the home loan banking sector.
| Rate of Interest | Highest Rate | Highest Rate |
| Salaried Individual | 7.80% | 6.66% |
| Self Employed Individual | 7.90% | 6.66% |
Like every other decision that you make in the home buying process, this decision is ultimately yours to make too. However, now you have with you a list of options to choose from, and we believe that you will make the right decision. If you are seeking some more clarity for a wise decision, you can also glance through the factors that you should consider before choosing a bank for your home loan.
When you begin with the process of analyzing and comparing banks suitable for a home loan, also take into account your personal needs and requirements. Each bank offers a variety of benefits, and every bank has its set of drawbacks too. While a bank might have more benefits than drawbacks for your requirements, for another home buyer the drawbacks might outweigh the benefits. Prioritize what suits you the best and then make your decision.
You must focus on the bank that will give you a deal that is hassle-free and has convenient repayment options. Take your time, and make sure that the lender and you are on the same page.
Also Read: Top 10 FAQs On Home Loans In India
Tell us what other home loan banks you have come across, and help other home buyers in their process. Even though the journey is different for all of us, the struggle to find the right bank for our dream home is the same!