Author
LoansJagat Team
Read Time
4 Min
16 Jun 2025
If you are confused which bank offers the lowest interest rate on home loans, then scroll down and find a detailed table with interest rate comparisons.
The table below shows how cumulative repo rate cuts by RBI have translated into EMI savings for borrowers with a ₹30 lakh home loan over 3 years.
Date | Repo Rate Cut | Cumulative Cut | EMI Before Cut | EMI After Cut | Monthly Saving (versus Feb) |
Feb ’25 | –25 bps | –25 bps | ₹9,735 | ₹9,522 | – |
Apr ’25 | –25 bps | –50 bps | ₹9,522 | ₹9,309 | ₹226 |
Jun ’25 | –50 bps | –100 bps | ₹9,309 | ₹8,864 | ₹445 |
So, in the best case scenario you can save ₹445 per month, which is ₹ 1,06,800.
To carry forward the benefit of repo rate cuts to the account holders, private and public sector 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.
Here’s how public and private sector banks adjusted their lending benchmarks after RBI's June repo rate cut:
Bank | Benchmark | New Rate (Post‑June) |
Punjab National Bank (PNB) | RLLR | 8.35 % |
Bank of Baroda (BoB) | RLLR | 8.15 % |
Bank of India (BOI) | RLLR | 8.85 % |
Indian Bank | RLLR | 8.70 % |
Canara Bank | RLLR | 7.80 %–8.15 % |
Union Bank | RLLR | 7.85 %–8.15 % |
Bank of Maharashtra | RLLR | 7.85 %–8.80 % |
Bank | Benchmark | Approx. New Rate Post‑June |
SBI (public but large) | EBLR / EBR | 7.50–8.45 % (EBR now 8.15 %) |
ICICI Bank | EBLR | 8.75 % |
HDFC Bank | MCLR | 8.50 % |
Axis / Kotak / IDBI Bank | EBLR/MCLR | 8.00–8.75 % |
Do you know why cafeterias of private schools charge so much even for a single samosa, while the entire mid-day meal is for free in a government school?
The same logic applies when looking at interest rates of private banks and public banks. Private banks base the interest of most of the loans on MCLR, which is more profit oriented, however public sector banks base their loans on RLLR or EBLR, to offer better and quick relaxations to its loan borrowers.
Reason | Public Sector Banks | Private Sector Banks |
Cost of Funds | Lower (high savings deposits) | Slightly higher |
Policy Mandate | Broader priority lending | Profit-driven |
Spread over benchmark | Often narrower | Usually wider |
Regulatory & Govt incentives | Access to stimulus push | Less direct access |
Market Competition | High, targeting mass borrowers | Segment-specific |
Public banks benefit from lower deposit costs, government directives to prioritize housing, and tighter spreads—making them more responsive to rate cuts.
Let’s analyse the effect of a 50 bps repo cut on a ₹1 crore loan for 20 years, comparing EMI impact across MCLR, EBLR, and RLLR-linked loans:
Loan Type | Before Rate Cut | After Rate Cut | EMI Before (₹) | EMI After (₹) | Difference (₹/month) | Total Interest Saved Over Tenure (₹) |
MCLR-based | 8.55% | 8.35% | 87,254 | 85,902 | 1,352 | 3,24,480 |
EBLR-based | 9.25% | 8.75% | 91,816 | 88,402 | 3,414 | 8,19,360 |
RLLR-based | 9.10% | 8.60% | 90,366 | 86,867 | 3,499 | 8,39,760 |
Conclusion: RLLR and EBLR-based loans show faster and more substantial transmission of repo rate changes than MCLR-based ones. However, borrowers should also factor in frequency of revision, tenure flexibility, and prepayment conditions.
RBI’s 50 bps cut in June—bringing the total to 100 bps this year—has significantly eased borrowing costs. A common ₹30 lakh loan now saves around ₹445 in EMI compared to February.
Public sector banks often pass on these benefits faster and with slimmer margins. Yet, top private banks like SBI, ICICI, and HDFC remain competitive, especially for borrowers with excellent credit.
If you share your current interest rate, reset date, and bank, I can help you drill down on your potential savings and next steps!
About the Author
LoansJagat Team
We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?
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