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New Delhi: The Reserve Bank of India (RBI) reduced the repo rate by 0.25% on December 5, 2025, Friday. The direct benefits of this rate reduction are now reaching the common people. Six big banks of the country have cut the interest rates of their home loans. The new rates have come down to 7.1%, which is the lowest in the last several months. This will provide a lot of relief to the people planning to buy a home.
All these banks have reduced home loan rates from 0.20% to 0.25%. After the deduction, the initial interest rates of almost all banks have now come down from 7.10% to 8.10%.
| Bank | cut | New interest rate |
|---|---|---|
| HDFC Bank | 0.05% | 8.30% |
| Punjab National Bank | 0.25% | 8.10% |
| Bank of India | 0.25% | 7.90% |
| Indian Bank | 0.25% | 7.95% |
| Axis Bank | 0.20% | 8.10% |
| Bank of Baroda | 0.25% | 7.10% |
Which bank has the lowest interest rate?
Punjab National Bank (PNB) and Indian Bank have reduced the interest rate by 0.25%, after which their new initial interest rate has reached 7.10%. This is one of the lowest interest rates available in the market at the moment.
| Interest rate | EMI per month | Total Payment | Total savings |
|---|---|---|---|
| Earlier: 8.15% | ₹33832 | ₹81,19,675 | — |
| Now: 7.90% | ₹33,209 | ₹79,70,182 | ₹149493 |
Above data taken from Groww Home Loan Calculator
Repo rate is the interest rate at which RBI lends money to banks. When the repo rate decreases, banks also start taking cheap loans and then they are able to give loans to customers at low interest. From this—
If you are thinking of a new loan, then this time is favourable. If the loan is already in operation, you can choose to reduce the EMI by taking information about the reduced interest from the bank. Make sure to compare the rates of different banks so that you can get the best deal. The public has benefited directly from the decision of RBI and six big banks have made the dream of buying a home easier by making home loans cheaper.
