Which bank has the lowest home loan interest rate in India 2026?

Union Bank of India and Bank of Baroda offer some of the lowest home loan rates starting at 8.35%–8.40% p.a. for eligible borrowers. SBI and PNB start at 8.50%. Private banks like HDFC, ICICI, Axis and Kotak start at 8.75%. Actual rates depend on your CIBIL score, income, loan amount and tenure.

What is EBLR and how is it different from MCLR?

EBLR (External Benchmark Lending Rate) is directly linked to the RBI repo rate and resets every quarter. MCLR (Marginal Cost of Funds based Lending Rate) is an internal bank rate that resets annually and lags rate changes significantly. All home loans sanctioned after October 2019 use EBLR, making them more responsive to RBI rate actions.

Loan Interest Rates India 2026

Q: What is the current RBI repo rate in 2026?

The RBI repo rate is 5.25% as of June 2026, following a series of cuts that began in February 2025 from a peak of 6.50%. The Monetary Policy Committee reduced rates by 25bps in February 2025, 25bps in April 2025, 50bps in June 2025, and 25bps in December 2025.

Q: How does the RBI repo rate affect my home loan EMI?

Floating-rate home loans are linked to the repo rate via EBLR (External Benchmark Lending Rate). When the RBI cuts the repo rate, your bank must pass on the benefit within 3 months — either reducing your EMI or shortening your tenure. A 25bps (0.25%) rate cut on a ₹50 lakh, 20-year loan saves approximately ₹850 per month or ₹2 lakh in total interest.

RBI repo rate history and current lending rates across major Indian banks — updated June 2026.

RBI Repo Rate History

MPC decisions from Feb 2020 — current rate 5.25% (held since Apr 2025)

Current: 5.25%

Mar 20COVID cut −75bpsMay 20COVID cut −40bps → 4.00%May 22Hike cycle beginsFeb 23Peak 6.50%Feb 25First cut in 5 yearsJun 25Jumbo cut −50bpsDec 25Cycle low 5.25%

Source: RBI Monetary Policy Committee decisions. Rate shown is the repo rate. EMI on floating-rate loans moves with benchmark rates linked to repo.

Bank Rate Comparison

Indicative interest rate ranges across major Indian banks — as of Jun 2026

Bank	Min	Max
Union BankLowest	8.35%	10.75%
Bank of Baroda	8.40%	10.90%
SBI	8.50%	9.65%
PNB	8.50%	9.85%
HDFC Bank	8.75%	9.65%
ICICI Bank	8.75%	9.80%
Axis Bank	8.75%	13.30%
Kotak Mahindra	8.75%	9.40%

Rates are indicative, subject to CIBIL score and lender discretion. Always verify current rates on the bank's official website before applying.

Understanding Loan Interest Rates in India (2026)

Interest rate is the single biggest driver of your loan cost after the principal amount itself. A difference of just 0.50% per annum on a ₹50 lakh home loan over 20 years adds up to over ₹3.8 lakh in extra interest — more than many borrowers realise when accepting the first offer they receive. This page tracks the RBI repo rate history and current lending rates from major Indian banks so you can make an informed borrowing decision.

What Is the RBI Repo Rate and Why Does It Matter?

The repo rate is the interest rate at which the Reserve Bank of India lends money to commercial banks overnight. It is the primary monetary policy tool used by the RBI's Monetary Policy Committee (MPC) to control inflation and stimulate or cool the economy. As of June 2026, the repo rate stands at 5.25%, down from a peak of 6.50% reached in February 2023.

For borrowers, the repo rate matters because all floating-rate home loans sanctioned after October 2019 are linked to it via the External Benchmark Lending Rate (EBLR). Banks set their home loan rate as: Repo Rate + Spread, where the spread depends on your CIBIL score and the lender's margin. When the RBI cuts the repo rate, your bank must pass on the benefit within 3 months — either reducing your EMI or shortening your tenure.

RBI Repo Rate Journey: 2020 to 2026

Mar–May 20204.00%

COVID emergency cuts

RBI slashed rates by 115bps in two off-cycle moves to support the economy through the pandemic — the sharpest rate reduction in over a decade.

May 20224.40%

Hike cycle begins

Surging inflation (above 7%) forced an off-cycle emergency hike of 40bps, ending a 2-year era of record-low rates. Five more hikes followed.

Feb 20236.50%

Peak rate

After 250bps of cumulative hikes over 10 months, the MPC paused at 6.50% — the highest repo rate since 2019 — and held it for nearly 2 years.

Feb–Dec 20255.25%

Easing cycle

With inflation under control and growth slowing, the MPC cut rates four times totalling 125bps. The 50bps cut in June 2025 was the largest single move since the COVID era.

How Rate Changes Affect Your Home Loan EMI

Since floating-rate home loans reset with the repo rate, every MPC decision directly impacts your monthly outgo. Here is how a ₹50 lakh, 20-year home loan EMI changes across the rate cycle:

Repo Rate Era	Approx. Home Loan Rate	Monthly EMI (₹50L, 20yr)
May 2020 – Apr 2022 (4.00%)	6.65%	₹37,822
Feb 2023 – Jan 2025 (6.50%)	9.15%	₹45,440
Jun 2026 (5.25%)	7.90%	₹41,739

* EMI estimates use the standard reducing balance formula. Actual rates include bank spread above repo rate.

EBLR vs. MCLR: Which Benchmark Is Your Loan On?

If your home loan was sanctioned before October 2019, it is likely on MCLR (Marginal Cost of Funds based Lending Rate) — an internal bank benchmark that resets annually and is slow to transmit rate cuts. If sanctioned after October 2019, it must be on EBLR (External Benchmark Lending Rate), directly linked to the repo rate with quarterly resets. The difference matters enormously during an easing cycle:

EBLR (Repo-Linked)

Resets quarterly — faster transmission
Repo rate cut → rate drop within 3 months
More volatile — rates rise quickly too
All new home loans since Oct 2019

MCLR (Internal Bank Rate)

Annual reset — slow to transmit cuts
RBI cuts may take 12–18 months to reflect
More stable during hike cycles
Old loans — consider switching to EBLR

If you are on MCLR and rates have fallen significantly, switching to EBLR (called a balance transfer or benchmark switch) may save you substantially — especially now that the repo rate has fallen 125bps since early 2025. Most banks charge a nominal conversion fee (₹2,000–₹5,000) for switching benchmarks.

How to Get the Lowest Home Loan Rate in India

1. Maintain CIBIL Score 750+

Banks typically offer the lowest spread above EBLR to borrowers with scores above 750. Below 700, you may pay 50–150bps more. Check your score before applying.

2. Compare at least 3 lenders

PSU banks (SBI, PNB, BoB) often have lower base rates. Private banks (HDFC, ICICI) offer faster processing. NBFCs serve borrowers PSU banks reject.

3. Negotiate the spread

The repo rate is fixed by RBI, but the spread above it is negotiable — especially if you have a high income, clean credit history, and are taking a large loan.

4. Watch out for teaser rates

Some lenders offer low rates for the first 1–3 years, then reset to market rates. Calculate the blended effective rate over the full tenure before comparing.

5. Consider loan tenure carefully

Longer tenures (30yr vs 20yr) lower your EMI but increase total interest significantly. Model both on our EMI calculator before deciding.

6. Time your application

Applying shortly after an RBI rate cut increases your chances of getting the new lower rate. Banks typically reprice within 30–90 days of an MPC decision.

Frequently Asked Questions

What is the current RBI repo rate in 2026?

The RBI repo rate is 5.25% as of June 2026. The MPC cut rates by a cumulative 125bps between February 2025 and December 2025, including a 50bps jumbo cut in June 2025. The rate has been held at 5.25% since then.

Which bank has the lowest home loan rate in India 2026?

Union Bank of India and Bank of Baroda start at 8.35%–8.40% for eligible borrowers. SBI starts at 8.50%. Private banks like HDFC, ICICI, Axis and Kotak Mahindra start at 8.75%. Actual rate depends on CIBIL score, loan amount and tenure.

Does a repo rate cut automatically reduce my EMI?

Yes, for EBLR-linked floating rate loans. Banks must pass on the benefit within 3 months. Your EMI will reduce (or tenure will shorten) at the next quarterly reset date after the rate cut. Check your loan agreement for the exact reset date.

What is the difference between home loan rate and repo rate?

Your home loan rate = Repo Rate + Bank Spread. For example, if the repo rate is 5.25% and your bank's spread is 3.25%, your home loan rate is 8.50%. The spread is fixed at sanction but the repo rate component changes with RBI decisions.

Calculate Your EMI at Today's Rates

Use these calculators with the current rate data above to plan your loan:

Home Loan EMI Calculator

Rates from 8.35% · Up to 30 years

Car Loan EMI Calculator

Rates from 7.99% · Up to 7 years

Personal Loan EMI Calculator

Rates from 10.75% · Up to 5 years

Loan Eligibility Calculator

How much can you borrow at current rates?

Compare Loan Offers

Side-by-side total cost comparison

Prepayment Calculator

Interest saved by prepaying now

Rates are indicative, sourced from publicly available bank websites and RBI publications as of June 2026. Actual rates depend on applicant profile, loan amount, and lender discretion. Always verify current rates directly with the bank before applying.