Home Loan: There is good news for those repaying home and auto loans. Public sector bank Canara Bank has reduced its MCLR (Marginal Cost of Funds Based Lending Rate) by 5 basis points (0.05%). This change has come into effect from November 12, 2025. This move may reduce EMIs for customers taking floating rate loans from the bank. Meanwhile, Bank of Baroda and IDBI Bank have not made any changes to their interest rates for now.
What is MCLR?
MCLR, or Marginal Cost of Funds-Based Lending Rate, is the base rate against which banks determine interest rates for floating-rate loans such as home loans, personal loans, and auto loans. When banks reduce MCLR, borrowers directly benefit from lower EMIs or a shorter loan term.
Now the interest rate will decrease so much
The new MCLR rates of Canara Bank are as follows-
Overnight MCLR now 7.90% (earlier 7.95%)
One month MCLR 7.95% (earlier 8.00%)
Three-month MCLR 8.15% (earlier 8.20%)
Six-month MCLR 8.50% (earlier 8.55%)
One-year MCLR 8.70% (earlier 8.75%)
The two-year MCLR is 8.85%, while
The three-year MCLR has been reduced to 8.90%.
Following this reduction, interest rates on Canara Bank’s home, auto, and personal loans will decrease, which could lead to a reduction in EMIs. For example, if a customer has a home loan of Rs 30 lakh with a term of 20 years, a 0.05% reduction in interest rates could result in savings of around Rs 150-200 per month.
What are the other banks doing?
While Canara Bank has provided relief by cutting interest rates, Bank of Baroda (BoB) and IDBI Bank have kept their lending rates unchanged. Bank of Baroda’s one-year MCLR remains at 8.75%. IDBI Bank’s one-year MCLR is also 8.75%, while the three-year rate is 9.70%.