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Home Loan Interest Rate: If you are planning to buy a new house or are troubled by the EMI of the already running home loan, then there is good news for you. The Reserve Bank of India (RBI) has reduced it from 6.00% to 5.50%, cutting the repo rate.

Soon after the move, many major banks like Bank of Baroda, HDFC Bank, Punjab National Bank (PNB), UCO Bank and Bank of India have decided to reduce interest rates on their home loans, which will provide direct relief to customers.

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This change is important because the repo rate is the interest rate on which RBI provides short -term loans to commercial banks. When it is cut, it becomes cheaper to get funds for banks, so that they also provide loans to customers at a low interest rate.

This cut in repo rate for the third consecutive time in 2025 is proving beneficial for those taking home loans, as it can provide relief in their EMI and reduce the total burden of loan.

Which banks are giving relief? (Home Loan Interest Rate)

1. Bank of Baroda (BOB)

• New RLR (REPO Linked lending Rate): 8.15%
• Cut: 50 basis points
• Applicable date: 7 June 2025
• Effect: Relief for both new and existing customers

2. HDFC Bank

• MCLR cut: 10 basis points
• New Rates:
  • Overnight – 8.90%
  • Three months – 8.95%
• Applicable date: 7 June 2025

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3. Punjab National Bank (PNB)

• Old RLR: 8.85%
• New RLR: 8.35%
• New home loan rates: Starts at 7.45%
• Applicable date: 9 June 2025

4. UCO Bank

• RLR cuts: 50 basis points
• Benefit: Relief on home, auto and affordable housing loans

5. Bank of India

• Cut: 25 basis points
• New lending rate: 8.35%
• Effect: Retail and MSME loan customers benefit

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EMI is reduced affecting your pocket (Home Loan Interest Rate)

Due to a total of 1% repo rate cut by RBI so far, there will be a direct decline in the EMI of home loans. For example, if someone’s home loan of ₹ 30 lakh is going on for 20 years, then the decrease of 1% interest rate can reduce the period of years and save millions of rupees.

If you want, you can reduce the loan duration or lighten your monthly financial responsibility by reducing EMI.

Is this the right time to buy a house? (Home Loan Interest Rate)

According to experts, the existing interest rates are at the minimum level of the last three years. In such a situation, this time can be extremely favorable for affordable and mid-incomplete segment. The cut in interest rates will bring new life to the real estate sector and there is a possibility of bounce in demand for affordable housing.

If you are thinking of buying a new property, it can be a financially appropriate time – especially when the loan is getting less interest and the builders are also offering attractive offers.

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