When we look for a home loan, whether it is floating or fixed, we search for banks offering the lowest rates. But we also want to figure out which type of loan will help us pay back the least amount- floating or fixed rate?
Floating vs fixed interest rate home loan
Both floating and fixed rate home loans come with their pros and cons. While in a floating rate loan, there is always a chance that the bank may lower the rate, in a fixed rate loan, there is no such option as the equated monthly instalments (EMIs) of the loan remains the same from the beginning to the end of the loan tenure.
On the flip side, in a floating rate home loan like one liked to repo rate, if the Reserve Bank of India (RBI) increases the repo rate and banks follow suit by increasing their floating rate home loan interest rates, borrowers have no choice but to pay more.
On the other hand, a fixed EMI may remain the same for a long term, but if the borrower's income increases, they might find it easier to pay it off.
For a borrower, the choice may depend on loan conditions, their repayment capacity and how comfortable they feel with repaying either loan type.
In this article, ET Wealth Online will guide you through the 10 lowest fixed and floating home loan interest rates offered by banks. (Interest rate data as per Paisabazaar as on May 25, 2026)
10 lowest fixed home loan interest rates
| Lender | Fixed Interest Rate (% p.a.) |
| Punjab National Bank | 8.20% - 10.75% |
| Canara Bank | 8.50% - 10.75% |
| Bank of Baroda | 8.75% - 10.00% |
| ICICI Bank | 8.90% - 11.20% |
| Indian Bank | 9.20% - 9.95% |
| Bank of India | 10.65% - 12.55% |
| IDBI Bank | 10.90% - 12.00% |
| Indian Overseas Bank | 11.00% onwards |
| Union Bank of India | 11.40% - 12.65% |
| Axis Bank | 14.00% |
10 lowest floating home loan interest rates
| Lender | Floating Interest Rate (% p.a.) |
| Bank of India | 7.10% - 10.25% |
| Indian Overseas Bank | 7.10% - 9.75% |
| Union Bank of India | 7.15% - 9.60% |
| Canara Bank | 7.15% - 10.00% |
| Indian Bank | 7.15% - 9.55% |
| Bank of Baroda | 7.20% - 9.25% |
| Punjab National Bank | 7.20% - 9.25% |
| IDBI Bank | 7.35% - 11.95% |
| ICICI Bank | 7.50% onwards |
| Axis Bank | 8.00% - 11.90% |
Bank-wise comparison of fixed vs floating home loan interest rates
| Lenders | Interest Rates (% p.a.) | Processing Fees | |
| Floating | Fixed | ||
| Bank of Baroda | 7.20 - 9.25 | 8.75 - 10.00 | 0.25% - 0.50% (Rs. 8,500 - Rs. 25,000) |
| Union Bank of India | 7.15 - 9.60 | 11.40 - 12.65 | 0.50% (Maximum Rs. 15,000) |
| Punjab National Bank | 7.20 - 9.25 | 8.20 - 10.75 | 0.35% (Rs. 2,500 - Rs. 15,000) |
| Bank of India | 7.10 - 10.25 | 10.65 - 12.55 | 0.35% (Rs. 3,500 - Rs. 30,000) |
| Canara Bank | 7.15 - 10.00 | 8.50 - 10.75 | 0.25% (Rs. 750 - Rs. 5,000) |
| IDBI Bank | 7.35 - 11.95 | 10.90 - 12.00 | Rs. 10,000 - Rs. 17,500 |
| Indian Overseas Bank | 7.10 - 9.75 | 11.00 onwards | 0.50% (Maximum Rs. 25,000) |
| Indian Bank | 7.15-9.55 | 9.20 - 9.95 | 1% (Rs. 1,500 - Rs. 15,000) |
| Axis Bank | 8.00 - 11.90 | 14 | Up to 2% |
| ICICI Bank | 7.50 onwards | 8.90 - 11.20 | Up to 2% |
Frequently Asked Questions (FAQs) about fixed vs floating interest rate home loan
What is a home loan with a floating interest rate?
As per the HDFC Bank website, “A floating interest rate is subject to periodic reviews and adjustments based on prevailing market conditions or an underlying benchmark rate. The interest rate may vary during the loan tenure.”
It is linked to a base rate offered by lenders and has a floating component, so changes in the base rate affect the loan’s interest over time.
What is a home loan with a fixed interest rate?
A fixed interest rate remains constant throughout the entire loan tenure. That means your Equated Monthly Instalment (EMI) amount will not change, regardless of fluctuations in market interest rates.
