Home loan EMIs continue to fall: 7 banks cut home loan interest rates after RBI repo rate cut in June
Synopsis Following the Reserve Bank of India's repo rate cut in June 2025, several major banks, including SBI, Union Bank, and Bank of Baroda, have reduced their lending rates. This move lowers home loan interest rates for borrowers with floating rate loans linked to the repo rate. Several major banks have reduced their External Benchmark Lending Rates (EBLR) or Repo Linked Lending Rates (RLLR) following the Reserve Bank of India's 50 basis point (0.50%) repo rate cut in June 2025. This translates into lower home loan interest rates for borrowers who have taken or are planning to take floating rate loans which are linked to repo rate.
ADVERTISEMENT
RBI's repo rate actions have a direct impact on home loan interest rates that follow Repo Linked Lending Rates (RLL
The RBI has cut the repo rate by 50 basis points, totalling a 100-basis-point drop in 2025. What does this mean for home loan borrowers? Should you reduce your EMI or your tenure? This video breaks down both choices with real numbers, revealing how you could save up to ₹35 lakh. It's a must-watch before you make a decision. R), an external benchmark linked rate which is linked to repo rate. A lower repo rate translates into a lower RLLR, which means that consumers will pay less in interest over the course of the loan term and have fewer EMIs (equivalent monthly installments) if they continue to pay existing EMIs despite a rate cut. If borrowers want to go lower EMIs then they can keep the tenure same and pay a lower EMI. However, borrowers should note that lower EMI will be applicable only on the reset date of the loan tenure which is usually once in three months.
Also read: Public vs private banks: Which of these offers the cheapest home loans now after RBI's 50 bps repo rate cut?
Here are banks that have cut their Repo-linked lending rate after the RBI rate cut in June.
1. Indian Overseas Bank Indian Overseas Bank has announced the reduction of Repo Linked Lending Rate (RLLR) by 50 basis points from 8.85% to 8.35%, effective from June 12, 2025.
ADVERTISEMENT
The State Bank of India (SBI) has revised its Repo Linked Lending Rate (RLLR) with effect from June 15, 2025, in response to the RBI's recent 50 basis point (0.50%) cut in the repo rate. The latest RLLR: 7.75% + Credit Risk Premium (CRP), according to the SBI website. Earlier RLLR: 8.25% + Credit Risk Premium (CRP).
ADVERTISEMENT The Union Bank of India has reduced both the External Benchmark Lending Rate (EBLR) and the Repo Linked Lending Rate (RLLR) by 50 basis points, bringing its EBLR down to 8.25% (comprising the new repo rate of 5.50% plus a spread of 2.75%).According to a press release from the bank, 'Following the Reserve Bank of India's reduction in the policy repo rate by 50 basis points, Union Bank of India has revised its key lending rates w.e.f. 11.06.2025. These changes include downward revision of External Benchmark Lending Rate (EBLR) and Repo Linked Lending Rate (RLLR) by 50 basis points. With this move, Union Bank of India has completely aligned its EBLR and RLLR with the recent RBI rate cut which will be beneficial to new and existing Retail (Home, Vehicle, Personal, etc.) and MSME borrowers.' Canara Bank has reduced its Repo Linked Lending Rate (RLLR) from 8.75% to 8.25% for loans tied to the External Benchmark rate. This decision follows the Reserve Bank of India's recent 50 basis point cut in the repo rate from 6.00% to 5.50%, announced during the latest Monetary Policy Committee (MPC) meeting. The revised lending rate will come into effect from June 12, 2025. This move will lower borrowing costs for customers with loans linked to RLLR.
ADVERTISEMENT
In a regulatory filing, PNB announced that it has revised its Repo Linked Lending Rate (RLLR) from 8.85% to 8.35%, effective June 9, 2025. The new rate reflects the 50 basis point cut in the repo rate and includes a Bank Spread of 20 basis points.'The Exchange is hereby informed that consequent upon the decrease in Repo rate by RBI on 06.06.2025, the Bank has revised RLLR from 8.85% (including BSP of 20bps) to 8.35% (including BSP of 20bps) with effect from 09.06.2025,' PNB stated in its filing.
ADVERTISEMENT 6. Bank of Baroda (BoB) home loan ratesBank of Baroda, in compliance with SEBI's disclosure norms, informed the exchanges that it has reduced its Baroda Repo Based Lending Rate (BRLLR) from 8.65% to 8.15%, effective June 7, 2025. This is also a 50 basis point reduction, in line with the RBI's move. 'Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform that BRLLR has been revised from 8.65% to 8.15% with effect from 07.06.2025,' the bank said.
7. Bank of India home loan rates Bank of India has also joined the rate-cut bandwagon, reducing its Repo Based Lending Rate (RBLR) from 8.85% to 8.35%, effective June 6, 2025. The bank in a BSE announcement stated, 'Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform that Repo Based Lending Rate (RBLR) has been changed w.e.f. 06.06.2025. 2. Today, RBI has revised the Repo Rate from 6.00% to 5.50% (decrease of 50 bps).The change in RBLR is as under. The effective RBLR is revised from 8.85% to 8.35%, down by 50 bps.'
Bank Old Rate New Rate Effective Date Indian Overseas Bank 8.85% 8.35% 12-Jun-25 State Bank of India 8.25% + CRP 7.75% + CRP 15-Jun-25 Union Bank of India 8.75% (approx.) 8.25% (approx.) Jun-25 Canara Bank 8.75% 8.25% 12-Jun-25 Punjab National Bank 8.85% 8.35% 9-Jun-25 Bank of Baroda 8.65% 8.15% 7-Jun-25 Bank of India 8.85% 8.35% 6-Jun-25
( Originally published on Jun 19, 2025 )
(Catch all the Personal Finance News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.)
Subscribe to ET Prime and read the ET ePaper online.
NEXT STORY
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
6 minutes ago
- Business Standard
Final RBI norms on project financing positive for power finance corp
Additional provisions forDate of Commencement of Commercial Operations deferred standard assets are reduced to 0.375 per cent-0.5625 per cent per quarter vs. 2.5 per cent for cumulative deferments Devangshu Datta New Delhi Listen to This Article The RBI has issued final project financing norms (effective from October 1, 2025) on the draft issued in May-2024. There are some key relaxations. Lower provisioning is required for standard assets. The revised provision is 1 per cent for under construction and 0.4 per cent for operational projects (vs 5 per cent and 2.5 per cent respectively in the draft). Additional provisions for DCCO (Date of Commencement of Commercial Operations) deferred standard assets are reduced to 0.375 per cent-0.5625 per cent per quarter vs. 2.5 per cent for cumulative deferments. Another key change is income recognition on accrual basis for
The Hindu
16 minutes ago
- The Hindu
HDB Financial Services launches ₹12,500 crore IPO as regulatory issues persist
HDB Financial Services on Friday (June 20, 2025) launched a ₹12,500-crore initial public offering (IPO), even as some regulatory issues surrounding the business persist. The company has set a price band of ₹700-740 for the fund raise, which is reportedly at a 66 per cent discount to the price of the share in the grey market. The IPO includes a ₹2,500-crore fresh capital raise and ₹10,000 crore offer for sale (OFS) from its parent HDFC Bank, which will lead to a 20 per cent reduction in the promoter shareholding in the entity to 75 per cent. HDB Financial, which had over ₹1 lakh crore in assets under management as of March 2025, is required to list by September this year as part of a Reserve Bank of India (RBI) listing mandate for bigger NBFCs, but the central bank's October 2025 proposal on forms of business will weigh on the investors. As per the circular, a bank needs to ensure that none of its subsidiaries undertakes the same activities as it. If a bank wants to continue with such arrangements, its shareholding in the NBFC is capped at 20 per cent. HDB Financial's Non-Executive Chairman Arijit Basu said "there is nothing which is uncommon" between HDFC Bank and the IPO-bound company, and stressed that the RBI's proposals have no bearing on HDB Financial as the onus is on the bank on whether it wants to continue with a business or not. Ramesh G, the managing director and chief executive, said HDB Financial has built the business, including enterprise loans, consumer loans, and asset finance from ground-up since 2008 and stressed that it operates independently in such a way that no sourcing is done from the promoter and the technology stack is also different. On the low valuations, a banker explained that typically, the grey or unlisted market's expectations do not influence the pricing of an issue. To a specific question on whether regulatory uncertainties had a bearing on the price band, another banker admitted that there were discussions and the price has been determined after extensive investor roadshows over the last few days. The banker said mutual funds, insurance companies, and foreign institutional investors are keen to subscribe to the issue, and claimed that HDB Financial will have one of the best anchor investor allotments when the details are disclosed next Tuesday. The public issue for shares of ₹10 face value — to be subscribed in multiples of 20 — will be open from June 25-27. The company management said improving the asset quality will be among the top priorities for the management going forward. The HDB Financial IPO is the second biggest in last three years after South Korean automaker Hyundai's ₹27,000-crore issue. Others, including HDB Financial's peer Tata Capital, Korean electronics company LG, and Indian startups Phonepe and Lenskart are among the other major issues lined up for listing. Mr. Ramesh said the RBI mandate to list by September had some bearing on the timing of the issue.
Hans India
26 minutes ago
- Hans India
Inflation eases further in May for India's farm and rural workers
New Delhi: The year-on-year inflation rates based on the all-India consumer price index for agricultural labourers (CPI-AL) and rural labourers (CPI-RL) for May this year declined to 2.84 per cent and 2.97 per cent, respectively, compared to 7 per cent and 7.02 per cent in the same month of the previous year, bringing respite to poor households, figures released by the Ministry of Labour & Employment on Friday showed. The inflation rate has also come down on a month-to-month basis, as corresponding figures for April 2025 stood at 3.48 per cent for CPI-AL and 3.53 per cent for CPI-RL. The inflation rate for agricultural and rural labourers has been steadily declining over the last seven months. This comes as a welcome relief for these vulnerable segments that are hit hardest by spiralling prices. It also leaves more money in their hands to buy a wider range of goods, leading to a better lifestyle. The decline in inflation for farm and rural workers has also come in the backdrop of a fall in the country's overall inflation based on the Consumer Price Index (CPI) to 2.82 per cent in May this year compared to the same month of the previous year. This is the lowest level of retail inflation since February 2019, according to a statement issued by the Ministry of Statistics on Thursday. Food Inflation declined to 0.99 per cent during May, which is the lowest since October 2021. This is the seventh month in a row that food inflation has registered a decline as the agricultural output has been on the rise. The significant decline in inflation during the month is mainly attributed to the decline in inflation of pulses, vegetables, fruits, cereals, household goods & services, sugar, and eggs. Inflation also declined due to a moderation in fuel prices, with international prices of crude oil coming down during the month. The RBI has revised its inflation outlook for 2025-26 downwards from the earlier forecast of 4 per cent to 3.7 per cent, Reserve Bank Governor Sanjay Malhotra said during the monetary policy review meeting earlier this month. CPI inflation for the financial year 2025-26 is now projected at 3.7 per cent, with Q1 at 2.9 per cent, Q2 at 3.4 per cent, Q3 at 3.9 per cent, and Q4 at 4.4 per cent. The easing of inflation has enabled the RBI to go in for an interest rate cut and a reduction in the cash reserve ratio (CRR)for banks to spur growth in the economy.
