The dream of owning a home is now closer than ever.
Home loan interest rates could soon drop to a historic low of 7.1%.
This is great news for anyone planning to buy a house, as it will reduce EMIs and help save lakhs over time.
Thanks to the RBI’s recent repo rate cut, banks are ready to pass this benefit directly to customers.
For prospective homebuyers, this is a golden opportunity to invest in property and finally own a home.
Lower interest rates mean more affordable EMIs and less financial stress.
Why Are Interest Rates Falling?
The Reserve Bank of India (RBI) has cut the repo rate by a total of 125 basis points this year.
After cuts in February and June, the rate dropped from 6.5% to 5.5%.
A lower repo rate allows banks to borrow money at cheaper rates.
Banks then pass these savings on to customers by reducing interest rates for home, auto, and personal loans.
Here’s a look at how some banks have already adjusted their rates:
| Bank | Previous Rate | New Rate |
|---|---|---|
| Bank of Baroda | 8.15% | 7.9% |
| Indian Bank | 8.35% | 8.1% |
| PNB | 8.35% | 8.1% |
| Karur Vysya Bank | 8.8% | 8.5% |
| Bank of India | 8.35% | 8.1% |
These reductions indicate that home loans could fall below 7.35% and may reach 7.1% in the coming months.
Who Benefits From Lower Interest Rates?
The repo rate cut doesn’t just help homebuyers. Several sectors stand to gain:
Auto Sector: Car and two-wheeler loans will become cheaper, boosting sales.
Real Estate: Lower EMIs encourage more people to buy homes.
NBFCs: Reduced borrowing costs strengthen the financial position of non-banking financial companies.
If inflation stays under control, the RBI may cut rates further, making loan markets more competitive and pushing interest rates even lower.
Banks may also launch attractive offers for new customers in the coming months.