Business EconomyPosted at: Dec 9 2025 2:55PM


Leading public, private banks cut home loan rates after RBI slashes repo rate

New Delhi, Dec 9 (UNI) After the Reserve Bank of India (RBI) cut down the major policy rate by 25 basis points to 5.25 percent, leading public and private sector banks have begun to reduce home loans.
Leading private sector lender, HDFC Bank, has reduced its marginal cost of funds-based lending rates by up to 5 basis points across tenures, with the MCLR now ranging between 8.30 percent and 8.55 percent. This is slightly lower than the earlier 8.35-8.60 percent band.
Typically, the banks price a large portion of retail loans against external benchmarks like the repo rate or internal benchmarks, such as the MCLR.
With the decrease in the policy rate, banks typically revise these benchmarks downwards.
Punjab National Bank has revised its repo-linked lending rate to 8.10 percent, down from 8.35 percent, while the Bank of Baroda has trimmed its benchmark retail loan rate to 7.90 percent from 8.15 percent.
Indian Bank has cut its repo-linked benchmark rate to 7.95 percent, while Bank of India has lowered its repo-based lending rate to 8.10 percent.
Bank of Maharashtra has also cut its home loan rate to 7.10 percent from the existing 7.35 percent. The bank has also lowered the car loan rates to 7.45 percent.
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on Friday unanimously decided to reduce the repo rate by 25 basis points to 5.25 percent with immediate effect, maintaining the 'neutral' stance.
Different banks have lowered their RLLR (Repo Linked Lending Rate), RBLR (Repo Based Lending Rate), and MCLR (Marginal Cost of Funds Based Lending Rate), MCLR-linked rates.
Depending on loan tenors, existing borrowers are likely to benefit from lowered EMIs of their loans or a shorter loan tenure.
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