HDFC, PNB and Others Drop Loan Rates After RBI Cut—Compare New Rates and Find the Cheapest Option

New Delhi: The month of December has brought relief for those who are preparing to buy a house. RBI reduced the repo rate by 25 basis points in its monetary policy. From February 2025 till now, the repo rate has been reduced by a total of 1.25 percent, and it is now at 5.25 percent. Its effect was immediately visible in the market. Many big banks have reduced their home loan rates.

How light will the EMI be?

If your loan of Rs 50 lakh is for 20 years, then by changing the rate from 8.5% to 7.25%, you are saving around Rs 3900 every month. Due to low interest rates, it has become easier for new buyers to buy a house than before.

Why did loans become cheaper?

The borrowing cost of banks reduces due to reduction in repo rate. RBI has given a clear signal to the banking sector that the benefits of this relief should reach the customers. For this reason, banks are reducing their lending rates—RLLR, RBLR, and MCLR. The market situation is also favorable. Inflation is under control, liquidity is fine, and demand in the real estate sector is increasing. For this reason, rate cuts were seen several times this year.

Which banks reduced interest rates?

1. HDFC Bank

• Reduction in MCLR by up to 5 basis points.
• Now the rate is between 8.30% and 8.55%
• Relief in EMI of MCLR-related customers

2. Punjab National Bank (PNB)

• RLLR reduced from 8.35% to 8.10%
• Effective from 6 December 2025
• The direct benefit of change in RLLR reaches the customers.

3. Bank of Baroda

• BRLLR reduced from 8.15% to 7.90%
• Cheap home loans to new customers

4. Indian Bank

• RLLR reduced from 8.20% to 7.95%
• Rate applicable from 6th December

5. Bank of India

• • RBLR reduced from 8.35% to 8.10%
• • Changes effective from 5 December 2025

6. Bank of Maharashtra – Cheapest home loan in the market

• Home loan rate reduced from 7.35% to 7.10%
• Relief on car loan rates and processing fees also
• Lowest interest rate in the market right now

Are there any changes you should make at this time?

If your home loan is ongoing or you are thinking of a new loan, these steps will help you:

• Check your loan reset date
• Compare with your bank's new rate
• Is it better to reduce EMI or reduce tenure—decide
• If you are on an old MCLR or base rate loan, consider shifting to a repo-linked loan

Will new customers get immediate benefits?

For new loan borrowers, banks update their card rates immediately, while existing customers will get the new rate on their reset date. If your bank has not been able to reduce the rate yet, then it is possible that it may also make changes in the coming days. Competition for home loans has again intensified in the market.

Will 2026 be better for home buyers?

The reduction of 125 basis points this year has brought down the cost of the loan considerably. EMIs are becoming lighter, and the shopping environment is also looking strong. More banks may update rates in the coming months.
If you are planning to buy a house, then this time may prove to be better for you.