Cheapest Home Loans: If you’re considering a home purchase, this news could be very important for you. December is proving to be extremely beneficial for those planning a home purchase. In its latest monetary policy, the RBI reduced the repo rate by 25 basis points. Since February 2025, the RBI has reduced the repo rate by a total of 1.25 percent, bringing the repo rate down to 5.25 percent. The impact of this change was immediately visible, and many major banks have reduced their home loan interest rates.

Relief in EMIs

Borrowers are already benefiting directly from the decline in interest rates. Lower interest rates mean lower monthly installments and cheaper loans. For example, if a customer takes out a home loan of ₹50 lakh for 20 years, their EMI reduces by approximately ₹3,900 when the interest rate drops from 8.5 percent to 7.25 percent. This reduces the financial burden on homebuyers and generates new demand in the property market.

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Why Interest Rates Decreased

The main reasons for the RBI’s continued rate cuts are lower inflation, improved liquidity, and increased economic activity. Lowering the repo rate reduces banks’ lending costs. The Reserve Bank has clearly directed public and private sector banks to pass on the full benefits of rate cuts to customers. This is why lending rates like RLLR, MCLR, and RBLR have been revised.

Which Banks Reduced Rates by How Much

HDFC Bank’s MCLR Decreased

HDFC Bank reduced its MCLR by a maximum of 5 basis points. The bank’s new MCLR range now ranges from 8.30 percent to 8.55 percent. This provides relief to EMIs on MCLR-based loans.

PNB Reduced RLLR

Punjab National Bank reduced its RLLR from 8.35 percent to 8.10 percent. This rate is effective from December 6th. RLLR is considered the most transparent lending rate, so customers benefit immediately from this reduction.

Bank of Baroda’s BRLLR Reduced

Bank of Baroda has reduced its benchmark retail loan lending rate from 8.15 percent to 7.90 percent. This has made home loans available to new customers at a lower price.

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Indian Bank’s RLLR Reduced

Indian Bank has reduced its RLLR from 8.20 percent to 7.95 percent. This rate is effective from December 6th and brings relief to both existing and new customers.

Bank of India Reduces RBLR

Bank of India has reduced its RBLR from 8.35 percent to 8.10 percent. This change is effective from December 5th, significantly reducing loan rates.

Bank of Maharashtra’s Cheapest Home Loan

Bank of Maharashtra has offered the lowest rates this year. The bank has reduced its home loan rates from 7.35% to 7.10%, which is considered the lowest in the market at this time. Additionally, the bank has also provided relief on car loan interest rates and processing fees, reducing the financial burden on customers.