Several major public sector banks have reduced their home loan interest rates after the recent 0.25 percentage point cut in the Reserve Bank of India’s repo rate. With this move, fresh home loan rates now start from around 7.10 percent, bringing relief to both new borrowers and existing customers through lower EMIs.
According to the latest bank announcements, Bank of Maharashtra is now offering one of the lowest headline home loan rates, starting at about 7.10 percent per annum. Other major lenders such as Punjab National Bank, Indian Bank, Bank of Baroda, Bank of India and some private banks have also cut their rates, with new offers typically beginning in the range of nearly 7.90 to 8.30 percent.
A reduction of 0.25 percentage point in interest can bring a noticeable saving over a long tenure loan. On a home loan of ₹20 lakh for 20 years, the EMI can fall by roughly ₹300 per month, which may reduce the total interest outgo by about ₹70,000–₹75,000 over the entire tenure. For a ₹30 lakh loan on the same tenure, the monthly instalment may drop by around ₹450–₹500, translating into a total interest saving of over ₹1 lakh.
The final rate offered to a borrower will still depend on several factors, mainly the credit score, income profile, loan-to-value ratio and overall credit history. Customers with a higher credit score, usually 700 or above, are more likely to get rates close to the advertised “starting from” offers, while weaker profiles may be charged a higher spread. Lenders may also impose conditions or additional charges based on risk assessment.
Borrowers are advised to understand pre-payment and foreclosure charges carefully before signing the loan agreement. Some banks may levy penalties if you repay a large part of the loan early, which can dilute the benefit of lower interest rates. It is also important to compare festive or special offers from different banks in detail, instead of choosing a loan only on the basis of headline rate, so that fees, processing charges and hidden costs do not erase the benefit of the rate cut.
