Summary of this article
Repo rate cut pushes lenders to reduce pricing
Home loan rates drop across major institutions
Borrowers may see lower EMIs soon
In the latest meeting, held from December 3 to 5, 2025, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has unanimously decided to further reduce the repo rate by 25 basis points, lowering it to 5.25 per cent.
When the repo rate is reduced, the cost of borrowing by the banks from the RBI also comes down. This generally results in lending rates offered to customers also being reduced, as the spread is kept at an acceptable level. Many lenders have already started reviewing their retail loan pricing, especially in the home loan segment.
Indian Bank Revises Benchmark Lending Rate
Indian Bank was one of the first public sector banks to announce a rate cut. The bank has reduced its repo-linked benchmark lending rate to 7.95 per cent from 8.2 per cent. The revised rate has become effective from December 6, 2025.
With a host of home loan products being linked to this benchmark, borrowers are likely to reap the benefits of a lighter EMI burden. The bank has said the revised pricing will remain in place until the next scheduled review.
Bank Of India Lowers Its RBLR
Bank of India has also cut its Repo-Based Lending Rate (RBLR) by 25 basis points, which takes it to 8.1 per cent. This move comes after the RBI announcement and will bring in some respite to the borrowers whose home loans are linked to the same rate. The lender said that the revision forms part of its effort towards ensuring that customers benefit from changes in the policy rates.
Bank Of Maharashtra Cuts Retail Loan Rates
Bank of Maharashtra has revised its lending rates for most retail loan categories. The bank has reduced the home loan interest rates by 25 basis points in line with the RBI's easing. The new rates were effective from December 5.
Post-revision, home loan rates at the bank begin at 7.10 per cent while car loans begin from 7.45 per cent. The bank said these changes will further strengthen its leading position in the competitive loan market and support consumer demand.
Current Home Loan Rates Of Leading Banks
Though some banks have already made the adjustments, other lenders are expected to further change their rates. The following are the current interest rate ranges being offered for home loans by major banks:
HDFC Bank: Home loan rates range from 7.9 per cent to 13.2 per cent per annum.
ICICI Bank: The private lender offers home loans with an interest rate between 8.75 per cent and 9.8 per cent per year.
Kotak Mahindra Bank: Rates of interest range from 7.99 per cent to 9.8 per cent.
Axis Bank: For borrowers with a CIBIL score of 751 and above, the rate is 8.35 per cent to 9.10 per cent; for those below 750, it becomes 8.6 per cent to 9.35 per cent.
State Bank of India (SBI): SBI offers home loans starting from 7.5 per cent and going up to 8.70 per cent per annum.
Canara Bank: The bank provides home loans at 7.4 per cent to 10.25 per cent per year.
Borrowers Are Likely To See Cheaper EMIs
A reduction in the repo rate usually results in a decline in the borrowing cost throughout the banking system. Customers holding floating-rate home loans could soon expect a cut in their equated monthly instalments (EMIs) once the banks complete the process of rate transmission. New borrowers can also expect more attractive loan pricing across home, car and other retail loan categories.
As more lenders are likely to revisit their rates, the overall cost of borrowing will decline in the coming days. The latest policy move by the RBI is expected to create a more supportive environment for retail customers planning to buy a home or refinance an existing loan.
