On 6 June 2025, the Reserve Bank of India’s Monetary Policy Committee delivered a surprise 50‑basis‑point cut in the repo rate, pulling it down from 6.0 % to 5.5 %.

Many policymakers are referring to this rate cut as similar to the Indian Air Force launching Brahmos, Agni, and Pinaka all at the same time. After all, the repo rate cut, the CRR cut, and then changing the policy stance to neutral is a once-in-a-blue-moon move.

To carry forward this benefit to the account holders, commercial banks have now pulled down their lending rates, recently. With some banks already reducing their rates, you could potentially save up to ₹10 lakh over your loan tenure just by understanding where and how this change affects you.

Read on to find out how.

Bank of Maharashtra Cuts Retail Loan Rates by up to 50 bps

Product	Old Rate*	New Rate ( w.e.f 10 June 2025 )	Reduction
Home loan	7.70 %	7.35 %	35 bps
Car / Auto loan	8.20 %	7.70 %	50 bps
Education loan	9.15 %	8.65 %	50 bps
Other RLLR‑linked retail loans	—	–50 bps vs. earlier slab	up to 50 bps

*Old rates reflect BoM’s floor rates after its April 2025 cut; home‑loan rates had been trimmed from 7.85 % to 7.70 % in mid‑April before this fresh reduction.

Read More – Bank of Maharashtra Timings – Working Hours

Bank of Maharashtra said the move is to adjust its pricing with the RBI’s June action and makes BoM’s entry‑level home‑loan rate the lowest among large public‑sector banks.

Car‑loan customers also benefit from a full 50‑bps pass‑through, bringing rates to 7.7 %.

Which Bank Now Offers the Lowest Home‑Loan Rates?

Bank	Home‑Loan Floor (post‑cut)	Drop vs. May 2025	Benchmark Type
Bank of Maharashtra	7.35 %	–0.35 %	RLLR
Indian Bank	8.20 %	–0.50 %	RLLR
Bank of Baroda	8.15 %	–0.50 %	EBLR
Canara Bank	8.35 %	–0.20 %	1‑yr MCLR
Bank of India	8.35 %	–0.50 %	RLLR

BoM decisively tops the list with its sub‑7.4 % headline rate, while the big‑four PSU peers cluster between 8.15 % and 8.35 %. Borrowers shopping for a fresh loan or looking to refinance have clear head‑room to save 80–100 bps simply by switching.

What to know about other changes in the interest rates offered by Bank of Baroda, Canara Bank, and Indian Bank, etc.? Read this article

How Much Can You Save?

Particulars	Before June Cut	After June Cut
Borrower	Aarav Kumar, salary ₹1.2 lakh/month	—
Loan amount	₹1 crore	₹1 crore
Interest rate	7.70 %	7.35 %
Tenure	20 years	20 years
Monthly EMI	₹ 81,787	₹ 79,645
Monthly saving	—	₹ 2,142
Total interest saved over 20 yrs	—	₹ 5.14 lakh

Even a seemingly modest 35‑bps cut trims Aarav’s EMI by over ₹2,100 every month — cash that can either speed up pre‑payments or bolster his investment portfolio. Over a 20‑year period, the cumulative interest saved crosses ₹5 lakh.

This shows that time is a great healer. Now imagine if you could park this amount in an FD and earn a modest 5% interest, annually. How much would you earn in 20 years?

Follow this table to know:

Amount Deposited	Interest Rate on FD	Time Period	Total Savings
₹ 5 lakhs	5%	20 years	₹ 13 lakhs

Shocked, right? That’s why patience is important in financial planning.

Difference Between MCLR, EBLR, and RLLR

While applying for a home-auto-or other retail loan, please check the interest rate on which your loan is based. There are 3 types and we have explained them:

Also Read - Bank of Maharashtra Net Banking

Parameter	Full Form	Linked To	Introduced In	Review Frequency	Transparency	Best For	Why Introduced?
MCLR	Marginal Cost of Funds Based Lending Rate	Internal Cost of Funds	2016	Monthly/Quarterly	Moderate	Short-to-Mid Term Loans	To improve the outdated base rate system and bring semi-transparency
EBLR	External Benchmark Linked Rate	External Benchmarks (e.g. RBI Repo)	2019	Dynamic (As per Benchmark)	High	Floating Rate Retail Loans	To enforce full rate transmission and transparency post-RBI recommendations
RLLR	Repo Linked Lending Rate	Directly to Repo Rate	2019	Changes with Repo Rate	Very High	Home/Personal/Auto Loans (Floating)	To ensure faster and complete transmission of monetary policy benefits to borrowers

Conclusion

With the RBI easing the interest rates and Bank of Maharashtra responding with an aggressive 50‑bps pass‑through, 2025 is shaping up favourably for retail borrowers.

If you have an outstanding loan linked to a slower‑moving benchmark (e.g., MCLR), now is the time to:

Check your reset date and request an immediate rate realignment.
Compare refinance offers — BoM’s 7.35 % is currently the public‑sector benchmark.
Re‑allocate EMI savings to higher‑yield instruments or step‑up pre‑payments to slash tenure.

In the post‑cut landscape, a little homework could keep upwards of half a million rupees in your pocket over the life of a standard ₹1 crore loan.

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