Buying a house is becoming cheaper thanks to the Reserve Bank of India (RBI) policies. In 2025, the RBI has already announced cuts in the repo rate twice totalling the cut to 50 basis points, bringing the benchmark repo rate to 6% from 6.5% earlier.
The rate cut since February 2025 has happened after RBI hiked the repo rate from May 2022 to February 2023 and kept unchanged since then. The 50 bps rate cut in repo rate has led to home loan interest rates dipping below 8%.
Has SBI lowered its home loan lending rates again? Check latest rates for May 2025
If you are looking for taking home loan now, ET Wealth online tells you the top 10 banks that are offering home loan interest rate up to 8%.
Lowest interest rates on floating-rate home loans
Given below are the lowest interest rates on floating-rate home loans by banks as of May 9, 2025. These interest rates are applicable only to eligible borrowers and are subject to change based on the lender’s policies and the prevailing macroeconomic conditions. Borrowers who do not meet the eligibility criteria for the lowest rate may be offered a higher rate, as determined by the lender. Your home loan EMI consists of two components – the principal and interest amount.Also read: How to check your CIBIL Score: A step-by-step guide to monitor your credit score
The EMI is calculated on a loan of Rs 30 lakh for 20 years.
| Lender | Type | Lowest Rate (% | EMI for 30 lakh loan |
| Canara Bank | Public Sector Bank | 7.80% | 24,720 |
| Bank of Maharashtra | Public Sector Bank | 7.85% | 24,810 |
| Central Bank of India | Public Sector Bank | 7.85% | 24,810 |
| Union Bank of Indi | Public Sector Bank | 7.85% | 24,810 |
| Indian Bank | Public Sector Bank | 7.9 | 24,900 |
| Indian Overseas Bank | Public Sector Bank | 7.9 | 24,900 |
| Bank of Baroda | Public Sector Bank | 8 | 24,900 |
| Bank of India | Public Sector Bank | 8 | 25,080 |
| State Bank of India | Public Sector Bank | 8 | 25,080 |
| Punjab National Bank | Public Sector Bank | 8 | 25,080 |
Source: BankBazaar data as on May 9, 2025
Factors affecting home loan EMI
Here are important factors that impacts home loan EMI, according to the Ujjivan Small Finance Bank website.
Credit score
Banks use credit scores to determine your creditworthiness. A credit score greater than 750 is generally considered good, whilst a credit score less than 750 is considered poor. If your credit score is below average, banks may charge higher borrowing rates.
Benchmark rates
Any change in the benchmark rate can have an influence on your home loan interest rate, assuming you have a floating interest rate. From October 1, 2019, RBI asked the banks to link the home loan interest rates to an external benchmark. The banks are free to use any external benchmark which are as follows:
Repo rate
Government of India’s three-month Treasury Bill yield published by the Financial Benchmarks India Private Ltd. (FBIL),
Government of India’s six-month Treasury Bill yield published by the FBIL and
Any other benchmark market interest rate published by the FBIL.
Hence, latest cut in the repo rate will bring down your home loan EMI as well. Loans disbursed by banks till September 30, 2019, are linked to Marginal Cost of Funds-based Lending Rate (MCLR). Existing borrowers have an option to switch to the external benchmarking lending regime.
Type of interest rate: Fixed or floating rate
Fixed-rate and floating-rate home loans have different interest structures. Fixed-rate loans typically have slightly higher interest rates compared to rates offered by floating-rate loans. However, floating-rate loans can be more unpredictable as they change over time based on market conditions.
Loan amount
When it comes to home loans, the loan amount requested can influence the interest rate offered by lenders. In general, larger loan amounts may attract higher interest rates, whilst smaller loans may have lower rates.
Location of the property
If the property you plan to buy is located in a prime area with a higher resale value, banks may charge a lower interest rate. The interest could be higher for properties with low accessibility and resale value.
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