Monthly housing budgets are likely to ease in the coming weeks, as multiple banks have begun lowering lending rates following the Reserve Bank of India’s 25-basis-point repo rate cut. With benchmark rates moving down, both new and existing home loan customers are positioned to benefit either through reduced EMIs or shorter repayment tenures, depending on their loan structure.
HDFC Bank has trimmed its Marginal Cost of Funds-based Lending Rates by up to 5 basis points across tenures, resetting the range to 8.30%–8.55% from the earlier 8.35%–8.60%. This shift provides incremental relief to borrowers tied to the MCLR system.
Punjab National Bank has cut its Repo Linked Lending Rate from 8.35% to 8.10%, effective 6 December 2025, enabling faster transmission of the rate cut to home loan EMIs. Indian Bank has adopted a similar approach, reducing its repo-linked lending benchmark from 8.20% to 7.95%, benefiting customers with floating-rate home loans.
Among public sector lenders, Bank of Maharashtra now offers home loans at 7.10%, down from 7.35%, while also lowering car loan rates and waiving processing charges to minimise up-front borrowing costs. Bank of Baroda has revised its Benchmark Retail Loan Lending Rate from 8.15% to 7.90%, extending a modest but direct reduction for retail borrowers linked to this rate.
For most customers, rate transmission will be visible during the next reset cycle. Borrowers tied to repo-linked loans should experience faster adjustments, whereas MCLR-based customers may need to wait for scheduled revisions. New applicants are set to gain immediately from the broader decline in lending rates across both home and auto products.
With more banks expected to realign their benchmarks in the days ahead, the overall trend points toward lighter EMIs and improved affordability in the housing credit market.
