The repo rate has been cut by a cumulative 1.25% in 2025, and borrowers expected home loan EMIs to finally ease. That relief has arrived but unevenly. While a few lenders now offer home loans starting at 7.15%, others remain noticeably higher.
So what’s really happening after the latest repo cut? And which bank actually gives you the lowest EMI today?
This article breaks it down clearly, independently, and with borrower-first insights.
Index
What Changed After the Repo Rate Cuts in 2025?
In 2025, the Reserve Bank of India reduced the repo rate four times, totalling 125 basis points (bps). Since most Indian home loans are linked to repo-based benchmarks (RLLR/BRLLR), banks can borrow cheaper and should pass on the benefit to customers.
Repo cuts in 2025
- February: 25 bps
- April: 25 bps
- June: 50 bps
- December: 25 bps
Total: 125 bps
The expectation was straightforward: lower lending rates → lower EMIs. But banks don’t all move at the same speed or to the same extent.
Banks That Passed the Benefit More Aggressively
Two lenders have emerged as early winners for new borrowers:
- LIC Housing Finance cut rates for new home loans to 7.15%, aiming to boost affordability and buyer sentiment.
- Union Bank of India reduced home loan rates by 30 bps to 7.15%, effective December 18, and is also offering a 0.10% concession on eligible green home loans.
These moves indicate faster and fuller pass-through of the repo cuts.
How Do SBI and HDFC Compare?
Large lenders responded but more cautiously:
- State Bank of India passed on up to 25 bps, bringing its RLLR to 7.50%.
- HDFC Bank trimmed rates modestly; home loans now start around 7.90%.
Quick comparison (starting rates)
| Bank | Starting Home Loan Rate* |
|---|---|
| LIC Housing Finance | 7.15% |
| Union Bank of India | 7.15% |
| Bank of Maharashtra | 7.10% |
| SBI | 7.50% |
| HDFC Bank | 7.90% |
*Rates depend on credit profile, loan amount, and terms.
Why Big Banks Didn’t Cut As Much (Yet)
If repo rates fell sharply, why the gap?
1) Margin protection: Large banks balance growth with profitability. Cutting too fast can squeeze spreads.
2) Staggered repricing: Even with RLLR, internal reset cycles and spreads delay full pass-through.
3) Demand confidence: Market leaders don’t need to be cheapest to attract borrowers service depth and trust carry weight.
4) Risk management: Conservative pricing helps manage credit risk during volatile cycles.
Bottom line: A repo cut doesn’t guarantee identical rate cuts across banks.
Which Bank Is Best for You Right Now?
- Lowest EMI focus: LIC Housing Finance, Union Bank of India
- Balance of rate + stability: SBI
- Premium service & convenience: HDFC Bank
Your actual best choice depends on CIBIL score, loan size, property type, and negotiation not just the headline rate.
What Existing Borrowers Should Do
If you already have a home loan:
- Confirm your benchmark (RLLR/BRLLR) and reset frequency.
- Check the spread many EMIs stay high because spreads weren’t reduced.
- Ask for a rate reset or consider balance transfer if the gap is wide.
- Use an EMI calculator to compare savings before switching.
Key Takeaways
- Repo cuts in 2025 are real and significant but benefits vary by bank.
- 7.15% rates are available today, but not everywhere.
- Don’t assume the biggest bank is the cheapest. Compare spreads, fees, and reset terms.
- Action now can save lakhs over the loan tenure.
Want to compare your EMI instantly or see if a switch makes sense? Use our Home Loan EMI Calculator and bank reviews to make a data-backed decision.