Prepayment is possible in home loan and there is no penalty on this as used to happen earlier. Essentially, when you prepay your loan, no matter how small or big it is, this goes as part of the principal and hence your principal outstanding goes down. As principal goes down, your interest liability also goes down. This will be applicable immediately.
Almost all banks give prepayment facility now because it is a mandate by RBI. Hence if you are choosing your bank on this parameter, go for any bank.
However, if you want suggestion on which bank you should approach for home loan, I would suggest you do research on the total cost of loan which includes interest rate, processing fee, etc. Typically PSU banks charge lower interests than private banks.