Summary of this article
· Bank of Baroda lowers mortgage loan rates to 9.15 per cent
· Floating car loan interest rates reduced to 8.15 per cent
· Rate cuts aim to stimulate lending during festive season
Bank of Baroda (BoB) has reduced the mortgage loan rates by 0.70 per cent (70 basis points ‘bps’). Mortgage loan refers to a loan against property. BoB has reduced the rate on such loans from 9.85 per cent to 9.15 per cent per annum. In addition, the bank has also cut the rate of interest on its car loan offerings. The floating rate car loan rate has come down to 8.15 per cent from 8.40 per cent, effective August 28, 2025. The move is to give impetus to low-cost borrowing to customers as the festive season starts.
Since the Reserve Bank of India (RBI) has cut the repo rate by 1 per cent (100 bps) this year, several banks have been adjusting their interest rates, including both lending and deposits rates. In the past few months, State Bank of India (SBI), Central Bank of India, Bank of India, Indian Bank, and HDFC Bank, among others, have reduced their marginal cost of fund-based lending rates (MCLR) to align with the RBI’s policy rate and their own liquidity and growth requirements.
Car Loan
Usually, people buy cars and two-wheelers during the festive season, and BoB’s decision to reduce the floating car loan interest rate by 25 bps to 8.15 per cent could enhance the bank’s lending. The revised rates will be available upon buying a new car, and the final lending rate will be determined considering the credit score and profile of the borrower.
“The festive season is an auspicious time for new beginnings, with many families aspiring to own a new vehicle. Bank of Baroda is pleased to introduce a special offer on our car loan rates that makes car ownership more accessible and affordable,” said Sanjay Mudaliar, executive director, Bank of Baroda, according to media reports.
Notably, the bank’s fixed-rate car loan interest rate is linked to the six-month MCLR, which is now 8.65 per cent per annum.
Mortgage Loan
The mortgage loan market is already competitive, and banks have reportedly been complaining about the irrationally low rate that is posing hurdles to expanding their books. Mudaliar said that Bank of Baroda is ready to make mortgage loan rates more competitive by reducing them by 70 bps to 9.15 per cent.
“Our mortgage loan offering is now even more competitive, providing a strong opportunity to unlock higher value from property. Customers can raise additional funds with interest rate reductions ranging from 55 bps to 300 bps, depending on their Cibil score,” he added.
