The repo rate, which is the rate at which RBI lends to commercial banks, directly influences lending rates across the banking system. (AI Generated Image)
The repo rate, which is the rate at which RBI lends to commercial banks, directly influences lending rates across the banking system. With this recent cut, banks have started reducing their repo-linked lending rates, making home loans cheaper for both new and existing borrowers.
Latest Lending Rates: Public Sector vs Private Sector
Here’s how leading public and private sector banks compare after the RBI’s June rate cut:
| Bank | Up to Rs 30 lakh | Rs 30–75 lakh | Above Rs 75 lakh |
|---|---|---|---|
| SBI | 8.00–9.20% | 8.00–9.20% | 8.00–9.20% |
| Bank of Baroda | 8.00–9.65% | 8.00–9.65% | 8.00–9.90% |
| Union Bank | 7.85–10.25% | 7.85–10.40% | 7.85–10.40% |
| PNB | 7.55–9.35% | 7.50–9.25% | 7.50–9.25% |
| Bank of India | 7.85–10.35% | 7.85–10.35% | 7.85–10.60% |
| Canara Bank | 8.00–10.75% | 7.95–10.75% | 7.90–10.65% |
| UCO Bank | 7.40–9.00% (all slabs) | ||
| Bank of Maharashtra | 7.35–10.15% (all slabs) | ||
| Punjab & Sind Bank | 7.55–10.75% (all slabs) | ||
| Indian Overseas Bank | 7.90–8.90% (all slabs) | ||
| Indian Bank | 7.40–9.40% (all slabs) | ||
| Central Bank of India | 7.85–9.45% (all slabs) |
Lowest rates:
Private Sector Banks – Higher Starting Rates
| Bank | Up to Rs 30 lakh | Rs 30–75 lakh | Above Rs 75 lakh |
|---|---|---|---|
| Kotak Mahindra Bank | 8.65% onwards (all slabs) | ||
| ICICI Bank | 8.50% onwards (all slabs) | ||
| Axis Bank | 8.75–12.80% | 8.75–12.80% | 8.75–9.65% |
| HSBC | 8.25% onwards (all slabs) | ||
| South Indian Bank | 8.30–10.60% (all slabs) | ||
| Karur Vysya Bank | 8.45–11.40% (all slabs) | ||
| Karnataka Bank | 8.62–10.86% (all slabs) | ||
| Federal Bank | 9.15% onwards (all slabs) | ||
| TMB | 8.50–9.75% (all slabs) | ||
| Bandhan Bank | 8.66–15.00% | 8.66–12.83% | 8.66–12.83% |
| RBL Bank | 9.00% onwards (all slabs) | ||
| CSB Bank | 9.61–11.34% (all slabs) | ||
| HDFC Bank | 8.45% onwards (all slabs) | ||
| City Union Bank | 10.05–15.45% | 9.85–15.45% | 9.85–13.75% |
Lowest rates:
Public Sector Edges Ahead on Cost
After the latest policy move, public sector banks are offering significantly lower starting rates compared to their private counterparts. Some PSBs like Bank of Maharashtra, UCO Bank, and PNB are offering rates below 7.50 per cent, while most private banks start around 8.25–8.75 per cent.
EMI Impact and Borrower Options
Home loan borrowers with floating interest rates linked to the repo rate will start seeing their EMIs drop in the coming months. Alternatively, the loan tenure may reduce if EMI amounts are kept constant.
Borrowers considering balance transfers to benefit from lower interest rates should compare more than just the base rate. Key factors include:
- Processing charges and administrative fees
Public sector banks, while offering lower interest rates and fees, are often criticised for slower processing. On the other hand, private banks offer faster approvals and more digitised services but at higher costs.
Final Word
If affordability is the priority, public sector banks are currently offering the cheapest home loans. For quicker processing and value-added services, borrowers might still opt for private lenders—though at a premium.
As always, compare offers and fine print before committing to a long-term loan.
