SBI, HDFC or Bajaj Housing: Which Bank Offers the Lowest Home Loan Rates?

Buying a home remains one of the biggest dreams for Indian families, and even small changes in interest rates can affect household budgets. In February 2026, the Reserve Bank of India (RBI) kept the repo rate unchanged at 5.25% in its latest monetary policy review, bringing relief to home loan borrowers and stability to the housing market.

RBI Maintains Balance Between Growth and Inflation

The RBI’s decision reflects a careful balance between economic growth and inflation control. The Monetary Policy Committee took the decision unanimously and retained a neutral stance, signaling that future action will depend on changing economic conditions.

By keeping the rate steady, the central bank aims to support economic expansion while keeping price pressures in check.

Relief for Home Loan Borrowers

A stable repo rate directly benefits borrowers with floating-rate home loans. Since loan interest rates are often linked to the repo rate, the chances of sudden EMI hikes are low. This offers relief to existing borrowers and gives new homebuyers more confidence to plan their finances.

Strong Growth and Low Inflation Outlook

India’s economic outlook remains positive. Current estimates suggest the country’s growth rate for FY 2026 could reach around 7.4%, while inflation is expected to stay near 2.1%. These figures point to a stable and balanced economic environment.

How Home Loan Interest Rates Are Decided

Most banks in India link home loan rates to repo-based or external benchmark systems. The final interest rate depends on factors such as:

• Credit score
• Income level
• Job stability
• Loan amount

Borrowers with higher credit scores generally receive lower interest rates.

Banks Offering Competitive Home Loan Rates

Public sector banks typically offer slightly lower home loan rates compared to private lenders. Current starting rates include:

• Bank of Baroda (BoB): From 7.10%
• Bank of India (BoI): From 7.15%
• State Bank of India (SBI): From 7.25%
• Union Bank of India: From 7.25%
• Punjab National Bank (PNB): From 7.30%

Among private lenders, HDFC Bank offers rates between 7.20% and 7.90%, while Bajaj Housing Finance and Canara Bank also provide loans starting from around 7.15%. SBI’s repo-linked loans have been seen around 7.5% for some borrowers, depending on their profile.

Good Time for First-Time Homebuyers

With interest rates stable, many banks are offering attractive deals, including discounts and reduced processing fees. These benefits could make home loans more accessible, especially for first-time buyers looking to enter the housing market.

The RBI’s decision to hold the repo rate steady brings stability to the housing sector and relief to borrowers. With steady growth, controlled inflation, and competitive loan offers, the current environment appears favorable for those planning to buy a home in 2026.

Disclaimer: This article is for informational purposes only. NewsPoint does not encourage anyone to take a loan. Readers should verify details from official sources and assess their financial needs before applying. NewsPoint is not responsible for any decisions or outcomes based on this information.