The interest rate on home loans or any other loan is dependent on the apex bank’s prime lending rate to the banks also known as the repo rate. On an individual level, Home Loan interest rates are dependent on the amount sought, loan tenure and the credit rating of the borrower. Thirdly, the Home Loan interest rate can vary from lender to lender. Lenders like SBI offers a higher rate of interest rate to its new customers compared to its existing customers.
Further, Housing Loan interest rates are of two kinds: fixed rate and floating. When there is a liquidity crunch in the market, the rate of interest tend to be higher, so banks are often willing to lock the loan amount at a fixed rate of interest that prevails throughout the loan tenure. But when the prevailing rate is lower, and banks see it rising in the cyclic order to things, it will either offer floating rate to its new customers (that adjusts with the repo rate) or charge a substantial higher (2-3%) fixed rate of interest, after factoring in the forecasted rise, down the line.