Alert: Banks Are Slashing Home Loan Rates by 0.25% – Check Yours Now!

If you have a home loan in India, check your email and SMS inbox right now. Major banks, including HDFC Bank, SBI, ICICI Bank, and Axis Bank, are sending notifications to customers about reductions in their home loan interest rates following the RBI's cumulative 125 basis point repo rate cuts in 2025.

What's Happening?

The Reserve Bank of India (RBI) has been on a rate-cutting spree in 2025. The repo rate has come down from 6.50% at the start of the year to 5.25% as of December 2025. This 125 basis point reduction is now flowing through to home loan borrowers.

• HDFC Bank: MCLR reduced by up to 5 bps. Home loan rates now starting from 7.20%-7.90% p.a.
• SBI: EBLR reduced to 7.90% (from 8.15%). Home loans now starting from 7.25% p.a., effective December 16, 2025.
• ICICI Bank: Home loan rates currently in the range of 8.65%-9.80% p.a.
• Axis Bank: Rates starting from 7.35% p.a. for customers with high credit scores.

How Much Can You Save?

Even a 0.25% reduction in your interest rate can make a noticeable difference:

What Should You Do Right Now?

1. Check Your Email/SMS: Banks are legally required to notify you of rate changes. Look for communication from your lender in the past few days.
2. Log into Your Loan Portal: Check your current interest rate under your loan account details. Compare it to the bank's current advertised rates.
3. Know Your Reset Date: If you have an external benchmark-linked loan (EBLR/RLLR), your rate resets every 3 months. Find out when your next reset is due.
4. Call Your Bank: If you haven't received any notification and your rate seems unchanged, proactively call your bank's customer service to confirm.

MCLR vs. EBLR: Is Your Rate Linked?

The speed at which you see benefits depends on how your loan is priced:

• EBLR/RLLR (Repo-Linked): If your loan was taken after October 2019, it's likely linked to the repo rate. Transmission is fast (within the quarter).
• MCLR-Linked: Older loans may be on MCLR, where banks have more discretion. Ask your bank about switching to an external benchmark if the spread is favorable.

Don't Just Accept a Lower EMI – Consider Prepayment!

Here's a power move: instead of just enjoying the lower EMI, keep paying the old EMI amount. The difference will go towards prepaying your principal, which will dramatically reduce your total interest and loan tenure. A ₹800 monthly surplus prepayment on a ₹50 Lakh loan can shave off 3-4 years from your tenure!