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Home Loan Interest Rates And Charges

Searching the market for getting the right home loan interest rate is essential. Housing loan interest rates will vary based on the different home loan schemes available for individual buyers, joint buyers, women, etc. You can use a free online home loan calculator to get a fair idea of the amount you are eligible for. Additionally, learning about the various terminologies related to home loan charges such as processing fee, home loan prepayment charges, legal charges, etc. beforehand can prove to be helpful while applying for a home loan.

Processing Fee

Processing fees refers to a one-time charge levied by Tata Capital on borrowers for processing their home loan applications.
The processing fee at Tata Capital is charged at 0.5% of the loan amount onwards + GST


Foreclosure means repaying your loan EMI in a lump sum rather than in instalments. A borrower at times ends up repaying their loan amount before the end of their prescribed time limit. In such cases, home loan pre closure charges will be levied by Tata Capital as a penalty for repaying the loan before the end of its term. No charges will be levied when you prematurely pay off your home loan with your own funds. If you foreclose your home loan using your own funds, no foreclosure charges will apply. However, if you pre-close using someone else’s funds, home loan pre closure charges will be levied by Tata Capital.

Delayed EMI Payments

Missing or defaulting on your home loan monthly instalment will lead to a situation where your EMI payments get delayed. This can usually happen when you have insufficient funds in your loan account. Delaying EMI payments can lead to penalties and will severely hamper your credit rating, in turn, causing trouble in all your future dealings and borrowings with other lending institutions.

In case of delayed EMI payments, charges of 2% over the prevailing rate will apply for the period of delay. 

There could be cases where the entire principal amount is transferred to another bank extending lower home loan interest rates. In case of such balance transfers, home loan transfer charges will be levied.


Collection Agency

Tata Capital may hire organisations that specialise in pursuing payments owed by businesses or individuals on actuals. Debt collectors operate on behalf of the party that is owed money and in return charge a fee which is usually a percentage of the total amount owed. usually charged on actuals

Legal Charges

Once a borrower submits the relevant property documents required for loan sanction on actuals, these documents are sent for legal verification. This verification happens at a fee that can vary depending on the lending institution. This verification happens at a fee usually charged on actuals. 

Other Parameters

PDC charges, loan cancellation charges, dishonour of cheque charges (cheque bounce), rejection of electronic clearance service (ECS) charges, PDC swapping charges, account maintenance charges, CERSAI charges apply.

Miscellaneous Charges

Processing Fee

0.5% of the loan amount onwards + GST

Home Loan Prime Lending Rates

 Effective Date                                                                      Prime Lending Rate                                            
 1st January, 2019  17.45%
 1st October, 2018  17.15%
 1st July, 2018  16.85%
 1st May, 2018  16.65%
 1st November, 2015  16.50%
 1st May, 2015  16.65%
 10th December, 2013  16.75%
 1st September, 2013  16.65%
 1st October, 2011  16.50%
 1st July, 2011  16.00%
 1st April, 2011  15.50%
 20th December, 2010  14.75%
 15th November, 2010  14.25%
 1st January, 2009  13.75%

What Is Repo Rate Linked Lending Rate?

The repo rate and lending rates are linked. The rate at which the RBI lends money to other commercial banks is called the repo rate. When this rate is reduced by the RBI, the lending home loan interest rates also go down for the borrowers.

How Is Home Loan Interest Rate Calculated?

Housing loan interest rate is usually calculated on your outstanding principal amount at the end of each day and charged to you on a monthly basis. The lending institution takes the outstanding per day loan amount and multiplies it by the interest rate that has been assigned to you. You can also use an online loan repayment calculator to keep a tap on the remaining amount owed by you.

Difference Between Fixed and Floating Interest Rates

People who have opted to repay their home loan through fixed and equally divided instalments across a fixed tenure have a fixed home loan interest rate - one that will never change no matter how volatile the market scenario gets. Alternatively, floating interest rates are volatile and keep changing as per the market scenario. This type depends on the alterable or floating base rate offered by lenders. Therefore, whenever the base rate changes, the interest rate also gets revised automatically.

Detailed FAQs

Our interest rates begin from 8.50% and are highly competitive. We offer concessional interest rates to women beneficiaries. Additionally, we provide subsidized home loans to low income groups under PMAY subsidy.

The following are the factors that influence your home loan interest rate –

  • MCLR Rates or Marginal Cost of Funds Based Lending Rate – The minimum rate at which a lender can offer you a loan

  • Type of Interest – Whether you choose a fixed, floating, or mixed interest rate

  • Loan-to-Value (LTV) Ratio – Percentage of the property value that can be financed using a loan

  • CIBIL or Credit Score – The higher the CIBIL score, the lower the rate of interest

  • Property Location – The more lucrative the property, the lower will be the rate of interest charged

  • Job Profile – Individuals with stable income charged lower interest rates

  • Loan Tenure – Shorter loan tenures attract lower rates of interest 

Foreclosure means to repay your entire home loan amount in a single payment instead of making Equal Monthly Instalments or EMIs. Loan lenders charge a certain fee as penalty for a home loan foreclosure. Foreclosure charges are generally levied when the home loan interest rate is fixed and has been pre-paid using sources that are not the applicant’s. Under such circumstances, a percentage of the outstanding principal amount plus taxes are levied as foreclosure charges.

Processing fee under home loan is the one-time amount charged by a lender at the time of processing the home loan application. The amount may differ from lender to lender. Generally, processing fees are non-refundable regardless of whether the home loan gets sanctioned or not. 


Home loan processing fee is a one-time amount charged by banks and NBFCs at the time of processing a home loan application. Under any circumstance, regardless of whether your home loan gets sanctioned or not, processing fee is not refundable.

Yes, home loan interest rates not only vary among different banks and lending institutions but also among cities depending upon the segmentation and the risk of the location.

If your home loan interest rate is fixed, then your EMI will remain unaffected by market fluctuations. However, if your home loan interest rate is floating, it will rise and fall with the market fluctuations. So, when the interest rate increases, your EMI amount will also increase and when the interest rate decreases, your EMI amount will also decrease.

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