RBI repo rate cut: Union Bank, Central Bank of India offer the cheapest home loans

Following the RBI's 25-basis point repo rate cut, several banks have reduced their home loan interest rates.

The Reserve Bank of India's (RBI) reduction of the repo rate by 25 basis points to 6.25 percent on February 7, its first cut in nearly five years, is expected to ease the burden on loan borrowers, particularly those with home loans.

All retail floating-rate loans sanctioned after October 1, 2019, are linked to an external benchmark, which is the repo rate in the case of most banks.

As a result, banks are required to pass on the full rate cut benefit to borrowers. As per RBI regulations, banks must review and adjust their interest rates at least once every quarter. Depending on your loan agreement terms, your bank’s rate transmission could be even sooner.

Following the RBI's 25 bps repo rate cut, several banks have reduced their home loan interest rates. Here's an overview of the banks offering the lowest rates post the rate cut. These rates are indicative and may vary based on individual factors such as credit score, income, and other criteria.

Data from Bankbazaar.com reveals that for a home loan of Rs 1 lakh for a tenure of 20 years, the top banks are offering interest rates ranging between 8.10 percent and 9 percent (data as on February 17, 2025, from the bank websites).

Union Bank of India and Central Bank of India

Starting at 8.10 percent, home loan interest rate offered by these two lenders is the lowest amongst all banks. Equated monthly installment (EMI) on a Rs 1-lakh loan with a 20-year tenure will work out to Rs 843.

Bank of Baroda, Canara Bank, Indian Bank and Punjab National Bank

These four banks levy interest rates starting from 8.15 percent. The EMI on a Rs 1-lakh loan with a 20-year tenure works out to Rs 846.

Also read | What's the smarter choice — to buy a flat or rent one?

State Bank of India

SBI charges interest, starting at 8.25 percent on home loans. The EMI on a loan of Rs 1 lakh with a 20-year tenure will amount to Rs 852.

Bank of India

Bank of India charges interest starting at 8.30 percent on home loans. The EMI on a loan of Rs 1 lakh with a 20-year tenure will be Rs 855.

Also read | Education loan vs savings fund: What's the best way to fund your child’s education?

IDBI Bank

IDBI Bank charges interest starting at 8.50 percent. The EMI on a home loan of Rs 1 lakh with a 20-year tenure will be Rs 868.

Axis Bank, HDFC Bank, ICICI Bank and Kotak Mahindra Bank

These banks charge interest starting at 8.75 percent on home loans. The EMI on a loan of Rs 1 lakh with a 20-year tenure will be Rs 884.

Yes Bank

Yes Bank charges interest starting at 9 percent. The EMI on a loan of Rs 1 lakh with a 20-year tenure will be Rs 900.