Home Loan Processing Fees and Charges

Updated on March 10, 2025

Author: MybankingTips Team

When comparing home loans from different lenders, many people focus only on the interest rates. But there are other costs involved too. Lenders charge fees for processing the loan and for administrative purposes. There are also additional charges like conversion fees or penalties for certain actions, such as changing the type of loan or missing payments. Knowing about these charges can help borrowers handle their home loans more effectively.

Important Fees and Charges of Home Loan

Loan Processing Charges

The processing fee is a one-time charge by lenders for handling your home loan application. It's usually not refundable. Depending on the lender, this fee can be as much as 3% of the loan amount. Sometimes, lenders may offer to waive this fee during special promotions or events.

Foreclosure Charges

This charge is a penalty if you pay off your entire loan before its term ends. Some lenders don't let you close your loan until you've paid a set number of EMIs. But according to RBI rules, banks and housing finance companies can't charge penalties for paying off floating interest rate loans early. However, for fixed-rate home loans, lenders can decide whether to charge a penalty for early repayment or not.

Partial Prepayment Charges

Penal charges/ Default interest/Late payment/ Overdue (per month)

When you miss your monthly home loan payments, the lender imposes penalty charges on the unpaid EMIs. These charges can be a fixed amount or a set percentage of the outstanding EMI(s). For example, IDFC First Bank might charge 2% per month of the unpaid EMI amount or a minimum of Rs 300, whichever is higher.

Conversion Charges

Banks and NBFCs charge conversion fees when you switch between fixed-rate and floating-rate home loans, or when you change your existing fixed interest rate. For example, with HDFC Ltd, if you switch your loan from a fixed rate to a floating rate, you'll need to pay 0.5% of the outstanding principal at the time of conversion, or Rs 50,000 plus taxes, whichever is lower.

Administrative Charges

Many lenders add an administrative fee on top of their processing fee. This fee isn't refundable and covers costs like legal verification, document examination, and property valuation. When choosing a home loan, borrowers should compare these fees. It's better to go for lenders with fixed administrative charges or ones with a maximum limit on them.

Home Loan Processing Fees offered by Top Banks and HFCs in India

Name of Lender	Processing fee (% of the loan amount)
State Bank of India	Rs 1,000 processing fee for YONO Insta Home Top-Up Loan and SMART Home Top-Up Loan. Rs 2,000 processing fee for Insta Home Top-Up Loan. No processing fee for Suraksha Loan, Privilege & Shaurya Home Loans, Apon Ghar (HL up to Rs 15 lacs), and Kerala Govt Employees Home Loan scheme. 100% waiver on processing fees for Balance Transfer and for fresh home loans for Resale/Ready to Move in properties. Processing fees range from Rs 2,000 to Rs 5,000 for regular home loans, NRI home loans, Realty, Maxgain, CRE, Flexi-pay, Non-salaried, PAL, Trible Plus & Apon Ghar Home Loan above 15 lacs.
HDFC	For Salaried/Self-employed Professionals: Up to 0.50% of the loan amount or Rs 3,000, whichever is higher. For Self-employed Non-Professionals: Up to 1.50% of the loan amount or Rs 4,500, whichever is higher. There's a 50% discount on processing fees.
Kotak Mahindra Bank	For Salaried professionals: 0.5% For Self-Employed professionals, HL top-up: 1%
Axis Bank	Up to 1% (Minimum Rs 10,000)
ICICI Bank	0.50%
Bank of Baroda	NIL
Godrej Housing Finance	Up to 3%
Tata Capital	Up to 0.50%
LIC Housing Finance	Flat Rs 3,000
PNB Housing Finance	Up to 1%
Punjab National Bank	NIL up to 31st March 2024
Bajaj Housing Finance	0.3% onwards
IDFC First Bank	Up to 3%
L&T Housing Finance	Up to 3%
Union Bank of India	NIL