RBI: The Reserve Bank of India (RBI) cut the repo rate by 25 basis points on 7 February 2025. The repo rate has increased to 6.25 percent after the RBI deduction. Many banks are reducing home loan interest rate since the repo rate decreases. This cut after about five years is expected to provide great relief to those taking home loans.
How will the benefit in interest rates?
After 1 October 2019, all floating rate loans are connected to an external benchmark, most of which is the repo rate benchmark for banks. This means that whenever RBI reduces the repo rate, banks have to make this benefit to the customers. According to RBI rules, banks are obliged to review and adjust interest rates every quarter. In some cases this benefit can be found even more quickly.
Banks reduce home loan interest rates
Following this announcement of RBI, many banks have cut their home loan interest rates. According to the data, interest rates on 20 -year home loan of one lakh rupees have now increased between 8.10 percent to 9 percent.
Lowest interest rate bank
Union Bank of India and Central Bank of India – starting from 8.10 percent
If you take a home loan of one lakh rupees for a 20 -year period, then your monthly EMI will be Rs 843.
Bank of Baroda, Canara Bank, Indian Bank and Punjab National Bank – starting from 8.15 percent
If you take a home loan of one lakh rupees for a 20 -year period, then your monthly EMI will be Rs 846.
State Bank of India (SBI) – Starts from 8.25 percent
EMI: 852 rupees monthly
If you take a home loan of one lakh rupees for a 20 -year period, then your monthly EMI will be Rs 852.
Bank of India – starts from 8.30 percent
EMI: 855 rupees monthly
If you take a home loan of one lakh rupees for a 20 -year period, then your monthly EMI will be Rs 855.
IDBI Bank – Starts from 8.50 percent
EMI: 868 rupees monthly
If you take a home loan of one lakh rupees for a 20 -year period, then your monthly EMI will be Rs 868.
Axis Bank, HDFC Bank, ICICI Bank and Kotak Mahindra Bank – Started from 8.75 percent
EMI: 884 rupees monthly
If you take a home loan of one lakh rupees for a 20 -year period, then your monthly EMI will be Rs 884.
Yes Bank – Starts from 9.00 percent
EMI: 900 rupees monthly
If you take a home loan of one lakh rupees for a 20 -year period, then your monthly EMI will be Rs 900.
How is the interest of home loan decided?
Interest rates depend on your credit profile, income, loan amount and other reasons. The better the credit score is, the lower the interest rate is likely.
What to do before taking a loan?
Compare interest rates: Watch the interest rates of all banks carefully and take a loan from the lowest interest rate bank.
Improve credit score: A good credit score (above 750) can get a low interest rate.
Calculate EMI: Keeping your income and budget in mind, calculate EMI.
Understand the terms of the bank: Take a loan only after understanding pre-payment and other charges before time.
This decision of RBI has brought great relief to those taking home loans. If you are thinking of taking a home loan, this may be the right time. Compare the rates of different banks and choose the best option according to your needs.
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