In a significant move benefiting homebuyers, Bank of Baroda has reduced its home loan interest rates by 40 basis points. Here’s everything you need to know about the new rates, eligibility, and key highlights.
Bank of Baroda (BoB), one of India’s leading public sector banks, has announced a major cut in its home loan interest rates, bringing a sigh of relief to prospective homeowners. According to the bank's official press release issued on May 5, 2025, the interest rate on home loans has been reduced by 40 basis points. This reduction brings the minimum interest rate down from 8.40% to a competitive 8.00% per annum.
The bank’s move follows the Reserve Bank of India's (RBI) decision to lower the repo rate by 50 basis points in April 2025. In response, several financial institutions have started adjusting their lending rates, and Bank of Baroda has now joined the list with this borrower-friendly initiative. The new interest rates are applicable to home loans and home improvement loans of ₹15 lakh and above.
As per the latest update:
Salaried individuals can now avail home loans at interest rates ranging between 8.00% and 9.50% annually.
Non-salaried applicants will be offered interest rates from 8.00% to 9.60% per annum.
The final interest rate offered to any borrower depends significantly on their credit score. Applicants with higher credit scores will be eligible for the best available rates under Bank of Baroda's revised structure.
Bank of Baroda generally follows the Bank’s Repo Linked Lending Rate (BRLLR) as the base, to which a credit risk premium is added. This means the actual home loan rate offered can vary from one borrower to another based on their individual risk profiles. While the 8.00% rate is now the minimum available, it is only accessible to applicants with excellent credit ratings and who meet other eligibility criteria.
To further encourage borrowing, Bank of Baroda is offering additional interest rate concessions for specific borrower categories:
Women borrowers: 0.05% per annum discount
Borrowers under 40 years of age: 0.10% per annum discount
Loan takeover with minimal documentation
Digital home loans with fast-tracked approval in select cases
These benefits make the new offering more attractive, especially for younger and first-time homebuyers.
This timely reduction in interest rates by Bank of Baroda is expected to give a significant boost to the housing sector and encourage more individuals to invest in property. With interest rates now starting at 8.00%, and additional perks for eligible borrowers, it's an opportune time to consider applying for a home loan.
Whether you’re purchasing your first home, renovating an existing one, or transferring your loan from another bank, the updated rates and offers by BoB could make your dream home more affordable.
