India’s largest public-sector banks, including State Bank of India (SBI), Punjab National Bank (PNB), and others, have reduced home loan interest rates following the Reserve Bank of India’s (RBI) latest decision to cut the repo rate by 25 basis points. This move has brought a wave of relief to existing borrowers and fresh homebuyers who were waiting for an opportunity to lock in affordable EMIs.
Home Loan Interest Rates Cut in April 2025
| Particulars | Details |
|---|---|
| RBI Repo Rate (April 2025) | 6.00% (cut by 25 bps) |
| SBI Home Loan Rate | Starts from 7.90% p.a. (for top CIBIL score customers) |
| PNB Home Loan Rate | RLLR at 8.85% |
| Indian Bank Rate | RBLR reduced to 8.70% |
| Effect on EMIs | Lower EMIs or shorter loan tenures |
The RBI’s proactive stance on reducing the repo rate in April 2025 has started benefiting lakhs of home loan borrowers across India. With SBI, PNB, and Indian Bank leading the way in slashing home loan rates, this is the right time to plan your real estate investment or refinance your current loan for better savings. Whether you’re a first-time buyer or an experienced investor, keeping an eye on interest rate trends can save you lakhs in the long run.
What Triggered the Interest Rate Cut?
The RBI’s Monetary Policy Committee (MPC) met in early April 2025 and announced a 25 basis points cut in the repo rate—bringing it down from 6.25% to 6.00%. This was the second straight rate cut in the calendar year, following another 25 bps cut earlier in January.
Why did RBI make this move?
- Global economic uncertainty due to rising geopolitical tensions.
- Cooling inflation, which gave the RBI room to support growth.
- A push to revive housing demand in urban and semi-urban markets.
The repo rate is the interest rate at which RBI lends money to commercial banks. When this rate falls, banks usually pass on the benefit to consumers by reducing their external benchmark linked lending rates (EBLR).
see also: Which 5 Banks Are Giving FD High Interest Rate in 2025
Which Banks Have Reduced Home Loan Interest Rates?
Let’s break it down by major banks:
1. State Bank of India (SBI)
- New home loan rates: Start from 7.90% p.a. (for CIBIL score above 750).
- EBLR: Adjusted to 8.65% from 8.90%.
- Effective Date: April 15, 2025.
2. Punjab National Bank (PNB)
- RLLR reduced to 8.85%, from 9.10%.
- BSP (Bank Spread) remains 0.20%.
3. Indian Bank
- RBLR brought down from 9.05% to 8.70%.
- Repo Benchmark: 6.00% (revised from 6.25%).
- Effective Date: April 11, 2025.
4. Bank of India
- New RBLR: 8.85%, down from 9.10%.
- Effective Date: April 9, 2025.
5. Canara Bank (Expected)
- As per trends, Canara Bank is also expected to revise its home loan rates soon.
How Does This Benefit Borrowers?
Lower EMIs for Existing Customers
If you already have a home loan that is linked to the repo rate, you will automatically see a reduction in your monthly EMI once the new rate is applied. Let’s consider an example:
- Loan amount: ₹50 lakh
- Old rate: 9% p.a. → EMI: ₹44,986
- New rate: 8.5% p.a. → EMI: ₹43,391
- Monthly savings: ₹1,595
- Annual savings: ₹19,140
More Affordable Loans for New Buyers
If you’re planning to buy a home, now is a great time to apply for a loan. Lower interest rates mean you can either opt for higher eligibility or pay less over the life of your loan.
Should You Refinance Your Home Loan?
If your current lender hasn’t passed on the rate cut, you can explore refinancing (balance transfer) options:
- Compare rates from SBI, HDFC, ICICI, and other banks.
- Use home loan calculators to check savings.
- Consider processing fees, legal charges, and documentation time.
Tip: Always ask your existing bank for a rate reduction before switching.
Fixed Rate vs Floating Rate – Which Is Better Now?
Floating Rate Loans
- Move in sync with the repo rate.
- Benefit from any future cuts.
- Most banks now offer repo-linked products.
Fixed Rate Loans
- Useful in a rising interest rate environment.
- Not ideal in today’s falling rate scenario.
Verdict: Floating rate loans are the smarter pick in 2025.
Expert Advice for New Borrowers
If you’re applying for a home loan now:
- Maintain a CIBIL score above 750 to get the lowest rates.
- Go for shorter tenures to save on total interest.
- Factor in hidden charges, insurance bundling, and prepayment clauses.
- Always compare processing fees (₹10,000–₹15,000 typically).
Pro Tip: Opt for auto-debit EMI and negotiate waiver on processing fees if possible.
see also: Bank of India Cuts Interest Rates and Discontinues 400-Day Special Scheme
Home Loan Interest Rates Cut FAQs
Q1. How can I check if my bank has reduced the home loan interest rate?
Visit your bank’s official website or call customer care. You can also log in to your net banking account to check the latest rates.
Q2. Will my EMI automatically reduce?
Yes, if you’re on a repo-linked loan, the change is usually automatic within a month of the RBI rate cut.
Q3. Is this a good time to buy a house?
Yes. With real estate demand picking up and loan rates at a low, this could be a golden window.
Q4. Can I switch from a fixed-rate loan to a floating one?
Yes, but you might incur a conversion fee. Check with your lender.
Q5. What is the current repo rate?
As of April 2025, the repo rate is 6.00%.
