Outlook Business Desk
-The Reserve Bank of India reduced the repo rate by 25 basis on April 9 to support growth. This led to a decrease in home loan interest rates and because of that, public sector banks like SBI, Union Bank and Bank of Maharashtra cut rates—some below 8%—while private banks were slower to respond as reported by Money Control.
Public sector banks promptly passed on the rate cut benefits to both existing and new home loan customers, lowering rates below 8%.
Union Bank of India cut its rate from 8.35% to 8.10%, one of the fastest to act after the RBI’s April 9 move, On the other hand Bank of Maharashtra matched Union Bank’s rate, reducing it to 8.10%, making home loans more affordable .
SBI dropped its home loan rate to 8.25% and revised its EBLR to 8.90%, effective April 15, 2025, While Bank of Baroda and Canara Bank brought their rates down to 8.15%, staying competitive among PSBs.
Since October 1, 2019, all retail floating rate loans are linked to external benchmarks, primarily the repo rate, facilitating quicker rate transmissions.
The RBI mandates that banks must pass on repo rate changes to existing borrowers, ensuring they benefit from monetary policy adjustments.
Existing borrowers should verify if their banks have implemented the rate cut benefits, as mandated by the RBI, to ensure reduced EMIs.
Lower interest rates translate to reduced EMIs, making home loans more affordable and potentially boosting the housing market.