Home loan EMIs appear to be easing further after the Reserve Bank of India (RBI) cut its repo rate by 25 bps on December 5, bringing it down to 5.25%. Overall, the bank has reduced the key rate at which it lends to commercial banks in India by 125 basis points in 2025.
RBI Policy Make Home loans affordable, save Rs 4000 monthly
Banks, including private lenders, have already adjusted their lending rates to match the RBI repo rate. Following the RBI’s latest cut, banks have started lowering their lending rates again. As a result, borrowers with a Rs 50 lakh loan for a 20-year term are saving nearly Rs 4,000 monthly on home loan EMIs. In this article, we will explore the banks that have reduced their lending rates since the RBI’s announcement.
This latest policy shift comes amid easing inflation, strong economic growth, and the RBI’s comfort with current liquidity conditions. For borrowers, this means lower interest costs and less pressure from EMIs in the coming months.
Banks begin sharing the benefits of the recent repo rate cut
Shortly after the December announcement, state-run lenders like Punjab National Bank, Bank of Baroda, Bank of India, Indian Bank, HDFC Bank, and Bank of Maharashtra acted first by lowering their rates. This means borrowers whose loan interest tied to the RBI benchmark will see their rates decrease automatically at their scheduled reset dates.
More banks are likely to follow suit. There are already rumors suggesting that the best borrowers soon see home loan rates drop to levels last seen during the pandemic. This rate shift expected to heighten competition among lenders, especially since housing demand has remained strong despite rising property prices.
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