Repo Rate Cut Impact: How Current Home Loan Interest Rates Compare Across Top Banks For December 2025
The RBI’s repo rate or lending rate for commercial banks impacts borrowing in the market.
The Reserve Bank of India (RBI) on Friday lowered the repo rate by 25 basis points to 5.25%, making borrowing cheaper for homebuyers and improving real estate sentiment. Governor Sanjay Malhotra said that the move considers global trade and geopolitical challenges.
While inflation is high in advanced economies, it is under control in emerging markets like India, giving the RBI space for an accommodative policy.
The RBI’s repo rate or lending rate for commercial banks impacts borrowing in the market. If the repo rate is reduced, the lending for consumers becomes cheaper as banks tend to pass on the benefits.
Lower home-loan interest rates primarily benefit new applicants by making fresh mortgages more affordable. Existing borrowers with floating rates also gain through reduced EMIs, which will ease their monthly financial pressure.
Together, these changes increase purchasing power for homebuyers. However, borrowers who are tied to fixed-rate loans see no change, as their interest rates remain locked in regardless of market adjustments.
With the RBI’s move, top Indian banks are expected to soon make announcements regarding reduced rates, hoping to attract more borrowers.
As of now, Punjab National Bank (PNB) is among the lenders, which has reduced its lending rates on major retail loans, including home loans. This move makes borrowing more affordable for customers looking to purchase property. On Saturday, the lender informed the exchanges about the revised rates.
Other banks are expected to follow suit soon. Currently, their interest rates are still based on the earlier policy. This means that borrowers with these banks have not yet seen any reduction in loan costs.
