The Reserve Bank of India (RBI) has delivered a pleasant surprise for home loan seekers. In June 2025, the central bank reduced the repo rate by 50 basis points (0.5%), marking its third reduction this year. With this, the total repo rate cut in 2025 now stands at 100 basis points (1%). This move is expected to bring down the cost of borrowing and make home loans more affordable for consumers.
Following this cut, many public and private sector banks have revised their home loan interest rates, with several offering attractive rates in the 7% to 8% range. If your existing or upcoming home loan is linked to the repo rate, you may soon benefit from lower EMIs or a shorter loan tenure.
A repo rate cut directly influences the interest rate at which banks borrow from the RBI. When the cost of borrowing decreases for banks, they often pass on the benefits to customers in the form of reduced lending rates. This means lower EMIs for borrowers and increased affordability in the housing market.
Public sector banks are currently leading the way in offering lower home loan interest rates, generally ranging between 7.35% and 8.15%. These banks are known for minimal processing fees and stable loan structures, though they may take longer to process applications.
On the other hand, private banks offer faster disbursal and more flexible services, but often charge higher interest rates and fees. It's crucial to compare offers, check your credit score, and understand each bank’s loan terms before deciding.
| Bank Name | Up to ₹30 Lakh | ₹30–75 Lakh | Above ₹75 Lakh |
|---|---|---|---|
| State Bank of India | 8.00%–9.20% | 8.00%–9.20% | 8.00%–9.20% |
| Bank of Baroda | 8.00%–9.65% | 8.00%–9.65% | 8.00%–9.50% |
| Union Bank of India | 7.85%–10.25% | 7.85%–10.40% | 7.85%–10.40% |
| Punjab National Bank | 7.55%–9.35% | 7.50%–9.25% | 7.50%–9.25% |
| Bank of India | 7.85%–10.35% | 7.85%–10.35% | 7.85%–10.60% |
| Canara Bank | 8.00%–10.75% | 7.95%–10.75% | 7.90%–10.65% |
| UCO Bank | 7.40%–9.00% | 7.40%–9.00% | 7.40%–9.00% |
| Bank of Maharashtra | 7.55%–10.15% | 7.55%–10.15% | 7.55%–10.15% |
| Punjab & Sind Bank | 7.55%–10.75% | 7.55%–10.75% | 7.55%–10.75% |
| Indian Overseas Bank | 7.50%–9.90% | 7.50%–9.90% | 7.50%–9.90% |
| Central Bank of India | 7.40%–9.40% | 7.40%–9.40% | 7.40%–9.40% |
| Indian Bank | 7.85%–9.45% | 7.85%–9.45% | 7.85%–9.45% |
| Bank Name | Up to ₹30 Lakh | ₹30–75 Lakh | Above ₹75 Lakh |
|---|---|---|---|
| Kotak Mahindra Bank | 8.65% | 8.65% | 8.65% |
| ICICI Bank | 8.50% | 8.50% | 8.50% |
| Axis Bank | 8.75%–12.80% | 8.75%–12.80% | 8.75%–9.65% |
| HSBC Bank | 8.25% | 8.25% | 8.25% |
| South Indian Bank | 8.30%–10.60% | 8.30%–10.60% | 8.30%–10.60% |
| Karur Vysya Bank | 8.45%–11.40% | 8.45%–11.40% | 8.45%–11.40% |
| Karnataka Bank | 8.62%–10.86% | 8.62%–10.86% | 8.62%–10.86% |
| Federal Bank | 9.15% | 9.15% | 9.15% |
| Tamilnad Mercantile Bank | 8.50%–9.75% | 8.50%–9.75% | 8.50%–9.75% |
| Bandhan Bank | 8.66%–15.00% | 8.66%–12.83% | 8.66%–12.83% |
| RBL Bank | 9.00% | 9.00% | 9.00% |
| CSB Bank | 9.61%–11.34% | 9.61%–11.34% | 9.61%–11.34% |
| HDFC Bank | 8.45% | 8.45% | 8.45% |
| City Union Bank | 10.05%–15.45% | 9.85%–15.45% | 9.85%–13.75% |
Public banks offer cheaper home loan rates, making them ideal for budget-conscious borrowers.
Private banks offer speedier loan processing but often at slightly higher rates and fees.
Compare interest rates, processing charges, and terms before finalizing your lender.
A high credit score can help you negotiate better rates, especially with private lenders.
If you already have a home loan, consider refinancing with a bank offering a lower rate to reduce EMIs.
Conclusion:
The RBI’s repo rate cut in June 2025 has made home loans more affordable across the board. Whether you're planning to buy your first home or looking to refinance an existing loan, now is a great time to explore your options and lock in a better deal. Be sure to read the fine print and compare multiple offers to make the most informed decision.
