In 2025, there is good news for home buyers. Leading public and private sector banks have reduced the home loan interest rates to below 7.5% because the Reserve bank of India cut the repo rate by 100 bps this year.
For 20 year long term loans of ₹50 lakh, the savings on EMI payments have increased considerably, especially for long-standing loans. Let us analyze the current offerings of the top banks in India.
What is the Reason for the Fall in the Home Loan Rates in 2025?
Due to repo rate cuts in February and in April, the RBI increased the rate in June, which 50 bps due to February and April rate cuts, this June. The 100 bps reduction allows home loans to become cheaper since all floating rate loans after 1st of October 2019 are linked to external benchmarks which is usually the repo rate.
Most Recent Home Loan Rates – July 2025
✅ Public Sector Banks Offering Rates Below 7.5%
- Canara Bank – Starting at 7.30%, among the lowest in the market.
EMI: 댓39,670 for a 50 lakh loan over 20 years - Union Bank Of India – Rates also starting at 7.30%
- Bank Of Baroda (BoB) – Starts at 7.45%.
EMI: 40,127 - State Bank Of India (SBI) – Starts at 7.50%.
EMI: 40,280 - Punjab National Bank (PNB) – Offers 7.50% starting rate.
- Bank of India, Bank of Maharashtra, and Indian Overseas Bank are also keeping rates highly competitive, hovering around this threshold to attract new borrowers."
🏢 Private Sector Bank Rates
- HDFC Bank – Offers starting rates from 7.90%.
EMI: 41,511 - ICICI Bank – Starts at 8.00%.
EMI: 41,822 - Kotak Mahindra Bank – Begins at 7.99%.
- Axis Bank – Slightly higher, with starting rates at 8.35%.
- Yes Bank – Among the costliest, starting at 9.00%.
Also Read: Your Salary Won’t Make You Rich
EMI comparison for 50 lakh home loan over 20 years.
|
Bank Name |
Interest Rate |
Approx EMI (₹) |
|
Canara Bank |
7.30% |
39,670 |
|
Union Bank of India |
7.30% |
39,670 |
|
SBI, BoB, PNB |
7.45–7.50% |
40,127–40,280 |
|
HDFC |
7.90% |
41,511 |
|
ICICI |
8.00% |
41,822 |
|
Axis Bank |
8.35% |
42,918 |
|
Yes Bank |
9.00% |
44,986 |
Points to Remember
- Rates are indicative and may vary depending on your credit score, income, & loan tenure."
- If you select a floating rate loan, your EMI will be impacted if there is future repo rate increase.
- Make sure to evaluate the processing fee, loan insurance, and even penalties for paying off the loan early.
Final Remarks
If you intend to purchase a home, the year 2025 offers the best opportunity to secure low interest rates on your home loan. Public and private sector banks are offering competitive rates, with SBI, BoB, Canara, HDFC, & ICICI leading the pack. Rates are especially attractive for smart borrowers, with rates fell 7.5%, leading to savings of several lakhs over the loan term.
✅ Have complete clarity on all the details, compare EMI outflow, and secure a pre-approval before signing the agreement.
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