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If you are planning to buy a home and considering a loan, several banks have lowered their interest rates. Some banks are offering home loans with interest rates starting at 7%. Read the full story below.

Home Loan Interest Rates: There is good news if you are planning to take out a home loan to purchase a house. As of August 2026, some banks are offering home loans with starting interest rates of 7%. Public sector banks are leading the way in this regard. According to data from Paisabazaar (as of August 26, 2026), Bank of Maharashtra and Central Bank of India are offering home loans with starting rates of 7%.

At Bank of India, home loan interest rates start at 7.10%, while UCO Bank and Union Bank of India offer starting rates of 7.15%. Canara Bank offers a rate starting at 7.25% for loans up to ₹30 lakh, which drops to 7.15% for loans exceeding ₹75 lakh. State Bank of India offers a starting interest rate of 7.25% across all loan slabs.

What are the offers from private banks?

Among private banks, South Indian Bank offers the lowest starting interest rate at 7.25%. Rates start at 7.48% for Karnataka Bank and 7.55% for ICICI Bank. HDFC Bank's starting rate is 7.75%, while Axis Bank offers home loans starting at 8%. RBL Bank's starting rate is 9%.

Housing finance companies are also offering home loans at lower interest rates. LIC Housing Finance offers rates starting at 7.15%, while Bajaj Housing Finance and ICICI Home Finance offer rates starting at 7.25% and 7.50%, respectively. At PNB Housing Finance, the starting interest rate for loans up to ₹30 lakh is 7.75%.

Do not make a decision based solely on the starting interest rate.

However, it is not guaranteed that every customer will receive the lowest interest rate advertised. Banks determine interest rates based on factors such as credit profile, income, employment, loan amount, and customer eligibility. Therefore, it is essential to compare offers from different banks before taking a loan.

One should consider not only the interest rate but also processing fees, other charges, and the total interest payable over the loan tenure. For large, long-term home loans, even a minor difference in the interest rate can significantly impact the total repayment amount.