Buying a home is a major financial decision, and choosing the right home loan can make a big difference in your overall cost and repayment experience. Two of India’s leading banks, SBI and HDFC, offer competitive home loan options, each with its own benefits, interest rates, and eligibility criteria. But which one is the best fit for you?
In this blog, we will compare SBI Home Loans and HDFC Home Loans based on interest rates, loan-to-value (LTV) ratio, processing fees, eligibility criteria, and repayment options. We’ll break down the details, helping you understand which lender offers the best deal based on your financial profile.
Whether you’re a first-time homebuyer, looking to renovate or extend your home, or planning to transfer your existing loan for better terms, this guide will provide valuable insights into SBI and HDFC’s offerings. Read on to make a well-informed decision and secure the best home loan for your dream home!
Table of Contents
SBI Home Loan and HDC Home Loan Comparison Table
| Feature | SBI Home Loan | HDFC Home Loan |
| Types of Loans | Home loans, loans for renovation, extension, balance transfer, top-up, and loans against property. | Home loans, renovation loans, extension loans, balance transfer, top-up loans, and plot loans. |
| Interest Rates | Starts at 8.50% (varies based on credit score). Higher CIBIL scores (800+) get lower rates. | Special rates: 8.75%–9.65%, Standard rates: 9.40%–9.95%. |
| Loan-to-Value (LTV) | – Up to ₹30 lakh: 90% of property value. – ₹30–75 lakh: 80% of property value. – Above ₹75 lakh: 75%. | – Up to ₹30 lakh: 90% of property value. – ₹30–75 lakh: 80%. – Above ₹75 lakh: 75%. |
| Processing Fees | Negotiable; varies based on loan amount. Starts at 0.35% | – Regular customers: Varies by loan type. Starts at 0.50% – NRI customers: Up to 1.25%. |
| Additional Charges | Starts at 1% of Market value or maximum 30000 | Starts at 1% of Market value |
| Eligibility Criteria | – Age: 18–70 years. – Available for salaried and self-employed individuals. – CIBIL score affects interest rates. | – Age: 18–70 years. – Minimum monthly income: ₹10,000 (low-income groups), ₹25,000+ for others. – Available for salaried, self-employed, professionals, and traders. |
| Fixed vs. Floating Rate | – Fixed: Higher but remains constant. – Floating: Linked to RBI repo rate, fluctuates. | – Primarily floating rates, some fixed-rate options available. |
| Top-Up Loan | Available for existing borrowers. | Available up to ₹1 crore for personal needs. |
| Home Renovation & Extension Loans | Rs. 50,000 to Rs. 50 crores | – Renovation loans cover 90% of renovation costs. Starts from 30 Lacs to 50 crores |
| Application Process | – Apply online or at a branch. – Requires salary slips, Form 16, business ITR (for self-employed). | – Apply online or at a branch. – Covers properties from developers, housing societies, authorities, and resales. |
| Loan Negotiation | Possible, especially for interest rates and processing fees. | Not explicitly mentioned but possible. |
| Property Verification | Done by SBI-appointed third-party lawyers and valuers. | Done by HDFC-appointed third-party lawyers and valuers. |
| Loan Disbursement | Amount transferred directly to the seller upon registration. | Amount transferred directly to the seller upon registration. |
| Insurance Requirement | Mandatory life insurance for borrowers (can be through SBI or an external provider). | Mandatory HDFFC insurance for borrowers (can be through SBI or an external provider). |
Apart from this if you are a businessman you can check the comparison of HDFC Bank and ICICI bank current account and also ICICI bank vs HDFC bank saving account comparison.
HDFC Home Loan Offer 2025
- Types of Loans Available – HDFC provides various home-related loans, including home loans, renovation loans, extension loans, top-up loans, loans against property, and balance transfer loans.
- Interest Rates – Special housing loan interest rates range from 8.75% to 9.65%, while standard housing loan interest rates range from 9.40% to 9.95%.
- Comparison with Other Banks – Interest rates at other banks vary, with HDFC Home Finance starting at 8.50%, PNB at 8.45%, Kotak Mahindra at 8.70%, and Bank of Baroda at 8.40%.
- Processing Fees & Additional Charges – HDFC charges a processing fee based on loan type. For NRI customers, it can be up to 1.25%. Additional costs include stamp duty, MO registration, and late payment charges (18% per annum).
- Loan Amount & LTV Ratio –
- Up to ₹30 lakh: Loan covers 90% of property cost
- ₹30 lakh to ₹75 lakh: Covers 80% of property cost
- Above ₹75 lakh: Covers 75% of property cost
- Eligibility Criteria –
- Minimum age: 18 years; Maximum age: 70 years
- Available for salaried, self-employed individuals, professionals (doctors, engineers, etc.), and non-professionals (traders, contractors, etc.).
- Minimum monthly income: ₹10,000 for low-income groups, ₹25,000+ for others.
- Loan Options – Loans are available for property purchases from private developers, housing societies, local authorities, and individual resales. Plot loans (including direct allotments & resale) are also available for up to 15 years.
- Home Renovation & Extension Loans –
- Home renovation loans cover 90% of renovation costs (e.g., tiling, plumbing).
- Home extension loans allow financing for adding new floors, with a tenure of up to 20 years.
- Top-Up Loan Option – Existing home loan borrowers can get an additional top-up loan for personal needs, with a maximum limit of ₹1 crore.
- Loan Repayment Details –
- Example: A ₹15 lakh loan for 15 years results in an EMI of ₹14,992.
- In early years, interest payments are higher than principal payments, but later, the principal amount increases.
- A loan calculator link is provided in the video description for precise EMI calculations.
SBI Home Loan Offer 2025
- Home Loan & Loan-to-Value (LTV) Concept
- Banks do not provide 100% of the property value as a loan.
- For properties up to ₹30 lakh, 90% loan is provided.
- For properties between ₹30–75 lakh, 80% loan is provided.
- For properties above ₹75 lakh, only 75% loan is given.
- Down Payment & Additional Costs
- Borrowers must pay the remaining property cost as a down payment.
- Other costs include stamp duty, valuation charges, and legal verification fees.
- Mandatory Insurance Requirement
- SBI mandates life insurance coverage for home loan borrowers.
- Borrowers can either buy insurance from the bank or opt for their own term plan.
- Fixed vs. Floating Interest Rate
- Fixed Rate: Remains constant throughout the loan tenure but is usually higher.
- Floating Rate: Linked to RBI’s repo rate; fluctuates over time.
- Current Interest Rates & CIBIL Score Impact
- SBI home loan interest starts from 8.60% but varies based on credit score.
- Higher CIBIL scores (800+) get lower interest rates.
- Scores below 750 may result in interest rates of 10-11%.
- Application Process
- Can apply online or by visiting an SBI branch.
- Required documents: salary slips, Form 16, business ITR (for self-employed), etc.
- Loan Negotiation
- Borrowers can negotiate interest rates and processing fees.
- Banks have pressure to disburse loans, making negotiation possible.
- Property Verification & Valuation
- SBI appoints third-party lawyers and valuers to verify property legal status and market value.
- Loan amount is determined based on the valuation, not just the seller’s price.
- Sanction & Disbursement
- After verification, a sanction letter is issued stating loan amount, tenure, and interest rate.
- Loan amount is directly transferred to the property seller’s account upon registration.
- Final Recommendations
- Floating interest rates are preferable due to potential future rate reductions.
- Visiting a branch before applying online is advised for better negotiation and clarity.
Final Verdict: SBI vs. HDFC Home Loan – Which One Should You Choose?
Both SBI and HDFC offer attractive home loan options, but the right choice depends on your financial situation and preferences. Here’s a quick summary to help you decide:
- Choose SBI Home Loan if:
- You prefer a lower starting interest rate (from 8.60%) that varies based on your CIBIL score.
- You want a government-backed bank with a strong reputation and wide reach.
- You are comfortable with mandatory life insurance coverage as part of the loan process.
- You want the flexibility of negotiating interest rates and processing fees in-branch.
- You are looking for a transparent property verification and valuation process before loan sanctioning.
- Choose HDFC Home Loan if:
- You need a wider variety of loan options, including home renovation, extension, top-up loans, and loans against property.
- You are looking for a competitive processing fee structure (up to 1.25% for NRIs) and are okay with additional costs like stamp duty and late payment charges.
- You prefer a private lender with a streamlined digital loan process and flexible loan repayment options.
- You need higher loan coverage (up to 90% for properties below ₹30 lakh) and better financing for renovation and extension projects.
Conclusion
If you prioritize low interest rates and government reliability, SBI is a great choice. However, if you need flexible loan options, faster processing, and additional benefits like top-up loans, HDFC may be a better fit.
Your best home loan depends on your income, credit score, and loan requirements. Compare the offers, negotiate where possible, and choose the lender that aligns with your financial goals!