The dream of buying a house is the biggest goal of every common man and to fulfill this dream, most of the people take the help of home loan. At present, both government and private banks of the country are offering home loans at competitive rates, due to which customers are confused about which bank they should take the loan from so that they have to pay the least interest. If you are also looking for funding for your home, then it is very important to know what is the difference in interest rates of government and private banks at present. Choosing the right bank can result in huge savings of several lakhs of rupees from the total cost of your loan. Starting interest rates of home loan in government banks: Public sector banks are always known for low interest rates and transparency. Home loans in major government banks of the country like State Bank of India (SBI), Bank of Baroda and Bank of India are starting at very attractive rates. Currently home loan interest rates in government banks generally start from around 7.10% and move up depending on the different categories. If your CIBIL Score is excellent i.e. 750 or more, then government banks give you priority in passing loans at the lowest rates. Apart from this, hidden charges in government banks are very less, which proves to be a great mental peace for middle class families. Interest Rates and Processing Speed ​​of Private Banks On the other hand, private sector banks like HDFC Bank, ICICI Bank and Axis Bank are known for providing very fast digital processing and door-to-door service to the customers. Home loan interest rates in private banks usually start from around 7.45% or 7.65%. Even though the initial interest rates of private banks may seem slightly higher than those of government banks, their loan approval speed is very fast. If you need instant loan dispersal with very few documents and in less time, then private banks and housing finance companies can prove to be a better option for you. Comparison Table of Interest Rates of Government and Private Banks Bank Name Type of Bank Starting Interest Rate (per annum) Key Features Bank of India Government Bank Starting from 7.10% Lowest starting rates on qualified and strong profile Bank of Maharashtra Government Bank Starting from 7.10% Popular for affordable rates and easy terms Bank of Baroda Government Bank Starting from 7.20% Best for Affordable Housing and Mid-Segment State Bank of India (SBI) Government Bank The country's most trusted bank, special for government and salaried people ICICI Bank Private bank Starting from 7.45% Fast digital processing and easy documentation HDFC Bank Private bank Starting from 7.75% Premium property and best for salaried professionals CIBIL score and other factors decide your real interest rate It should always be kept in mind that the lowest starting rate shown in bank advertisements is It turns out that not every applicant gets it. Your actual interest rate depends entirely on your personal financial health. In this, your high CIBIL score, stability of your monthly income, whether you are an employee or a businessman, and how much down payment you are making, all these things play a major role. If your CIBIL score is above 750, banks will give you the least interest rate benefit. Conversely, interest rates may increase if the score is low. What things should you keep in mind while choosing the right bank? While choosing a lender, do not just consider the interest rate as the criteria, but also get complete information about the processing fee, foreclosure charge (fee for repaying the loan before time), and part-payment rules. Many times banks charge more money in other charges by luring them with low interest. If you want low interest and long term peace of mind, public sector banks are better. At the same time, if speed and modern technological facilities are your priority, then private banks can be the right choice for you.