Top 3 Banks Reduce Home Loan Interest Rates—See the New Rates Now

RBI: Three public sector banks in the country have made their home loans more affordable. On December 5, the Reserve Bank lowered the repo rate from 5.50% to 5.25%, prompting most banks to cut their home loan rates linked to the RLLR. Punjab National Bank (PNB) announced on Saturday that it has decreased its repo linked lending rate (RLLR) from 8.35% to 8.10%.

This new rate is effective from December 6, 2025. The bank has stated that there will be no changes to the MCLR and base rate for now. Additionally, Bank of India and Indian Bank have also lowered their interest rates. Indian Bank has cut its repo-linked benchmark lending rate from 8.20% to 7.95%. These updated rates are effective from December 6.

What will be the impact on EMI?

If your home loan is tied to the RLLR, you’ll see the benefits of this reduction at your next reset date, which could mean a lower EMI or a shorter loan term. However, those with loans linked to the MCLR or Base Rate won’t experience any benefits at this time, as those rates remain unchanged.

Bank of India

Bank of India has also lowered its Repo Based Lending Rate (RBLR) by 25 basis points. The new rates took effect on December 5. Previously, the RBLR was 8.35%, but it has now dropped to 8.10%. The bank explained that this adjustment was made in response to the RBI’s monetary policy reduction. They believe that the RBLR cut will help customers with home loans, car loans, or MSME loans linked to the repo rate. This interest rate reduction means lower EMIs or quicker loan repayments, which is expected to lighten the monthly financial load for millions of borrowers.

Indian Bank has also taken a similar step and reduced its Repo Linked Benchmark Lending Rate (RBLR). The bank has reduced the RBLR from 8.20% to 7.95%. The new rates have come into effect from December 6, 2025. The bank stated that this reduction has been made entirely in keeping with the RBI’s new policy. Apart from this, Indian Bank has also reduced its MCLR by 5 basis points, which will make interest rates even cheaper for loan customers.