The RBI’s Monetary Policy Committee, at its three-day meeting from December 3-5, unanimously decided to slash the repo rate, while maintaining a neutral policy stance.
Following the repo rate cut announcement by the RBI, Bank of India and Indian Bank announced new home loan interest rates on Friday. Several other lenders are also expected to revise their home loan interest rates soon.
Bank of India, Indian Bank slash home loan interest rates
Indian Bank on Friday announced a downward revision in its repo-linked benchmark lending rate following the RBI’s decision. The public sector lender said that its repo-linked benchmark lending rate has been reduced to 7.95% from 8.2%. According to the bank, the new rates come into effect from December 6.
The new lending rates will effectively bring down interest rates on long-duration lending, like home loans, leading to lower EMI burden for borrowers.
“The revised rate is effective from December 6, 2025, till the next review,” the bank informed stock exchanges in a filing.
Bank of India also reduced its Repo-Based Lending Rate (RBLR) by 25 basis points to 8.1%, following the RBI’s decision to cut the benchmark repo rate on Friday.
The new rates came into effect from December 5, the state-owned lender said in a stock exchange filing. “The revision is on account of downward revision in Repo Rate announced by RBI, today, in its monetary policy,” the bank said.
Home loan interest rates by top banks
HDFC Bank: The largest private lender in India currently charges interest rates between 7.9% to 13.2% per annum on home loans.
ICICI Bank: The leading private lender currently levies interest rates on home loans ranging between 8.75% and 9.8% per annum.
Kotak Mahindra Bank: Home loans currently start from 7.99% and go up to 9.8% per annum
Axis Bank: For borrowers with a CIBIL score of 751 or above, home loan interest rates vary between 8.35% and 9.10% per annum. The bank charges interest rates ranging from 8.6% to 9.35% for borrowers with CIBIL scores below 750.
State Bank of India: The largest public lender offers home loans at an annual interest rate of 7.5% to 8.70%.
Canara Bank: The lender currently charges interest rates ranging from 7.4% to 10.25% per annum for home loans.
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When the repo rate is slashed, commercial banks usually reduce their loan interest rates. A lower repo rate allows banks to borrow money from the RBI at a cheaper interest rate and banks often pass on this benefit to customers by reducing interest rates.
After the latest RBI repo rate cut, many top banks are expected to reduce their home loan interest rates soon. This means home loans, car loans, and other retail loans could become cheaper, helping borrowers pay lower EMIs.