Bank of Maharashtra Slashes Retail Loan Rates by Up to 50 Basis Points — Big Relief for Borrowers

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

*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.

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?

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?

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:

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:

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:

1. Check your reset date and request an immediate rate realignment.
   
   
2. Compare refinance offers — BoM’s 7.35 % is currently the public‑sector benchmark.
   
   
3. 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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LoansJagat Team

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