Cheapest home loan rates in October 2026: 12 lenders offer 7.1%-7.35% interest; EMI revisions may follow

The RBI's Monetary Policy Committee voted unanimously for the increase. The MPC also changed its stance from "neutral" to "calibrated tightening"

RBI Governor Sanjay Malhotra said that the Indian economy has been strong, and economic momentum remains broad based. However, he noted that the inflation outlook has worsened since the last policy meeting. He also said that rate cuts are off the table in the near term, and the policy action ahead can only be a rate hike or a pause, depending on the evolving conditions.

Today's repo rate hike is set to raise the cost of repo-linked home loans as these are priced at the repo rate plus a spread. Banks are expected to pass on the 25 bps increase to eligible borrowers over the coming weeks, which will push up either the EMI amount or the remaining tenure for borrowers. Against this backdrop, here are the 12 lenders offering the lowest starting home loan rates in the 7.1% to 7.5% band, as of today, based on data on their respective websites:

Please note that the above rates are the starting, or floor, interest rates offered by lenders and they may not apply to every borrower, since lenders adjust rates based on credit profile, income, employment type, loan-to-value ratio and property details.

The rates listed above were announced by the lenders before the October 7 repo rate hike and are likely to be revised upward in the coming weeks.

LIC Housing Finance is not a bank but a housing finance company, and it has been included because it currently offers one of the cheapest home loan rates. Several private banks, including HDFC Bank, IDBI Bank, HSBC, IDFC First Bank are also offering rates below 8% to select borrowers.

Who gets the cheapest home loan interest rates?

Most lenders offer their lowest home loan interest rates to individuals with very high credit scores, generally 800 or above. Rates also vary by employment status. For instance, salaried employees typically get better rates than non-salaried and self-employed borrowers. A clean repayment record, a lower loan-to-value ratio and a long-standing relationship with the lender can further improve the rate on offer.

Borrowers should also note that the spread over the repo rate is fixed at sanction and does not improve as the credit score rises. With rates now on the way up, it may be worth checking whether a balance transfer to a lender offering a lower spread makes sense.