From HDFC to SBI, look beyond interest rate when taking a home loan

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The interest rate is the most important criterion, but also consider how the rate is benchmarked, the terms and conditions for repayment and balance transfer, and the processing fee.

  • Banks usually lend up to 80-85 per cent of the property value, and up to 90 per cent in case of properties costing up to Rs 3 million
  • Loan eligibility depends on repayment capacity, which in turn will be a function of your monthly income and that of your spouse, number of dependants, other loan liabilities, etc
  • Loan tenure should not exceed your date of retirement
  • Do a comparison of interest rates using aggregator websites
  • Consider the processing fee 
  • Find out the terms and conditions for prepayment and balance transfer
  • Citi has launched a home loan linked to an external benchmark. The interest rate on such a loan is likely to fall faster in response to declining interest rates