Home loan borrowers are going to get a relief as many major banks have started cutting loan rates after the Reserve Bank of India reduced the repo rate by 25 basis points to 5.25% on December 5, 2025. Following the repo rate cut to 5.50%, lenders have moved to reduce MCLR-, RLLR- and RBLR-linked rates, paving the way for lower equated monthly installments (EMIs) or shorter loan tenures for eligible borrowers, depending on the individual loan terms. HDFC Bank has cut marginal cost of funds based lending rates (MCLR) by up to 5 basis points for all tenors. According to ET report, after the revision, HDFC Bank’s MCLR now stands between 8.30% and 8.55%, whereas earlier it was between 8.35% and 8.60%, thereby benefiting borrowers linked to this benchmark. Punjab National Bank has reduced its Repo Linked Lending Rate (RLLR) from 8.35% to 8.10% with effect from December 6, 2025, including a 10 basis point benchmark spread premium. In a notification to BSE, the bank said the revision follows the RBI’s repo rate cut announced on December 5. According to a disclosure on the BSE website, Bank of Baroda has revised its benchmark retail loan lending rate (BRLLR), reducing it from 8.15% to 7.90%, which will provide marginal relief on retail loan interest costs. Indian Bank has also reduced its repo-linked benchmark lending rate, reducing RLLR to 7.95% from 8.20%. According to an official press release, the revised rates came into effect on December 6, 2025 and will be applicable across the bank’s asset portfolio. Bank of India announced reducing its Repo Based Lending Rate (RBLR) from 8.35% to 8.10% with effect from December 5, 2025. In a regulatory filing, the bank said the rate cut was in response to the reduction in repo rate by the RBI. Bank of Maharashtra has also reduced its retail loan rates, reducing home loan interest rates from 7.35% to 7.10% and car loan rates from 7.70% to 7.45%. According to a post shared by the lender on X, the bank has also waived off processing fees on these loans, reducing the upfront cost for borrowers. With many banks readjusting lending rates following the RBI policy move, borrowers linked to floating-rate home and retail loans can expect ease in EMIs in the coming months as rate cuts in the loan benchmark are reset.
