Buying a home may now become easier for many people across India. Several major banks have reduced their home loan interest rates after the Reserve Bank of India (RBI) lowered the repo rate.
This move is expected to give relief to both new home buyers and existing loan customers. Lower interest rates can reduce monthly EMIs and make home loans more affordable.
Current Date & Time (IST): May 11, 2026, 2:53 PM IST
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RBI Repo Rate Cut Brings Big Relief
The home loan market has seen major changes after the RBI reduced the repo rate by 1.25% or 125 basis points in May 2025. At present, the repo rate stands at 5.25%.
After this decision, many public sector banks started reducing their Marginal Cost of Funds-Based Lending Rate (MCLR). This directly affects home loan interest rates and can help borrowers save money over time.
Last year, banks such as Punjab National Bank, Indian Bank, Bank of India, and Bank of Baroda reduced their MCLR by 5 basis points.
Punjab National Bank Reduced Rates Across All Tenors
Punjab National Bank (PNB) surprised customers by reducing MCLR rates across all loan periods.
One-year MCLR reduced from 8.95% to 8.90%
Three-year MCLR reduced from 9.25% to 9.21%
This change can benefit customers planning to take long-term home loans.
Indian Bank Also Announces Rate Cut
Indian Bank has also reduced its MCLR by 5 basis points for selected periods.
The revised rates came into effect from July 3, 2025. Customers taking new loans after this date may get loans at lower interest rates.
Bank of India Lowers Key Loan Rates
Bank of India has reduced MCLR rates by 5 basis points across all tenors from July 1, 2025.
One-year MCLR reduced from 9.05% to 9%
Three-year MCLR reduced from 9.20% to 9.15%
The one-year MCLR is important because many loan interest rates are linked to it.
Bank of Baroda Offers Lowest Home Loan Rate
Bank of Baroda has also made home loans cheaper for customers.
The bank reduced its home loan interest rate to 7.45%. Along with this, it has also removed processing fees, making loans more affordable for borrowers.
This decision came after the bank had already reduced loan rates earlier in June last year.
Good Time for Home Buyers?
With multiple banks reducing home loan rates, this could be a good opportunity for people planning to buy a house.
Lower interest rates can help customers reduce EMI burden and make property purchases easier. However, borrowers should still compare loan offers, processing charges, and repayment terms before choosing a bank.