Repo rate- Brief history
| Date | Repo rate (%) | Change (%) |
| 07-Feb-25 | 6.25% | -0.25% |
| 09-Apr-25 | 6.00% | -0.25% |
| 06-Jun-25 | 5.50% | -0.50% |
| 06-Aug-25 | 5.50% | 0% |
| 05-Dec-25 | 5.25% | 0.25% |
| 06-Feb-26 | 5.25% | 0% |
| 08-Apr-26 | 5.25% | 0% |
How repo rate impacts home loan interest rates
The repo rate is the rate at which banks borrow money from the RBI. When the Central Bank cuts the repo rate, banks can borrow money from the RBI at lower rates. They transfer their benefits to their borrowers and cut loan interest rates.
Interest rate of most of the floating rate home loans are linked to external benchmarks such as Repo Rate and this rate falls the first when the RBI cuts the repo rate. Those with their loans linked to Marginal Cost of Funds-based Lending Rate (MCLR) also sees a slow-paced transmission of repo rate cut into their loan EMIs. There is no change in fixed interest rate loans.
The opposite happens when the RBI increases the repo rate and banks follow-in footsteps. In situation like the present, when the Central Bank has maintained the repo rate, banks maintain the status quo given the impact of previous repo rate changes has completed fully.
But given geopolitical crisis in the form of the Iran-Israel conflict that is triggering the inflation rise in India, a future repo rate hike is quite a possibility, which can lead banks to increase loan rates.
Home loan interest rates- PSU banks
| Name of Lender | Loan Amount (Rs) | ||
| Up to 30 Lakh | Above 30 Lakh & Upto 75 Lakh | Above 75 Lakh | |
| PUBLIC SECTOR BANKS | |||
| State Bank of India | 7.25-8.70 | 7.25-8.70 | 7.25-8.70 |
| Bank of Baroda | 7.20-9.00 | 7.20-9.00 | 7.20-9.25 |
| Union Bank of India* | 7.15-9.50 | 7.15-9.50 | 7.15-9.50 |
| Punjab National Bank | 7.25-9.10 | 7.20-9.00 | 7.20-9.00 |
| Bank of India | 7.10-10.00 | 7.10-10.00 | 7.10-10.25 |
| Canara Bank** | 7.25-10.00 | 7.20-10.00 | 7.15-9.90 |
Source: Paisabazaar
Home loan interest rates- Private sector banks
| Name of Lender | Loan Amount (Rs) | ||
| Up to 30 Lakh | Above 30 Lakh & Upto 75 Lakh | Above 75 Lakh | |
| Private sector banks | |||
| Kotak Mahindra Bank | 7.70 onwards | 7.70 onwards | 7.70 onwards |
| ICICI Bank | 7.45 onwards | 7.45 onwards | 7.45 onwards |
| Axis Bank | 8.00-11.90 | 8.00-11.90 | 8.00 – 9.10 |
| HSBC Bank | 7.45 onwards | 7.45 onwards | 7.45 onwards |
| South Indian Bank | 7.20 onwards | 7.20 onwards | 7.20 onwards |
| HDFC Bank | 7.75 onwards | 7.75 onwards | 7.75 onwards |
Source: Paisabazaar
Home loan interest rates- Housing finance companies
| Name of Lender | Loan Amount (Rs) | ||
| Up to 30 Lakh | Above 30 Lakh & Upto 75 Lakh | Above 75 Lakh | |
| Housing finance companies | |||
| LIC Housing Finance | 7.15 onwards | 7.15 onwards | 7.15 onwards |
| Bajaj Housing Finance | 7.15 onwards | 7.15 onwards | 7.15 onwards |
| Tata Capital | 7.50 onwards | 7.50 onwards | 7.50 onwards |
| PNB Housing Finance | 7.50 onwards | 7.50 onwards | 7.50 onwards |
| ICICI Home Finance | 7.50 onwards | 7.50 onwards | 7.50 onwards |
| Godrej Housing Finance | 7.60 onwards | 7.60 onwards | 7.60 onwards |
Source: Paisabazaar
How inflation can impact home loan rates in the future
Fuel and energy prices rose in India due to the Israel-Iran conflict-led supply disruptions. Rising costs have also started reflecting in prices of essential household items. Inflation rose from 1.33% in December 2025 to 3.21% in February. It is likely to be higher when March and subsequent month inflation data is released. If inflation rises, the RBI will most likely rise the repo rate in the upcoming MPCs. Banks will also increase repo rate-linked home loan rates then. For now, repo rate-linked loans won’t get costlier. But even in future if banks increase loan rates, there are a lot of ways you can save the interest amount. Here we discuss some of such strategies.
Home loan prepayment
Prepayment is an effective strategy for trimming a home loan interest, tenure or both. One can choose prepaying a percentage of the loan, a fixed amount or extra EMI(s) every year. A borrower can make a prepayment at any stage of the loan, but they can save a higher amount if they prepay the loan in its early years. When a borrower prepays a home loan, the lender gives them two options- either they can reduce the EMI with same tenure or keep same EMI with reduced tenure.
After the prepayment, if a borrower chooses to go for the reduced EMI amount, the loan tenure remains the same, but there is good savings on interest amount.
If the same borrower chooses to keep the EMI amount the same as before the prepayment, interest amount saving is bigger and loan tenure is also reduced. The interest saved in such a stage is significantly higher than what the borrower gets when he/she chooses to reduce the EMI amount.
Let’s see how much interest and time you can save in different prepayment conditions. Our calculations will show only conditions when you choose to keep the EMI the same as before prepayment.
Interest and tenure saved when you make one-time prepayment
Let’s assume your home loan outstanding principal is Rs 50 lakh, the remaining tenure is 20 years, and the interest rate is 8%. If you choose to make a one-time prepayment of Rs 5 lakh (10% of principal), you will save Rs 15.85 lakh in interest and four years and one month (49 months) in tenure.
One-time prepayment calculations for different outstanding loan amounts
| Outstanding principal amount | Outstanding tenure (years) | Interest rate (%) | Prepayment amount (10% of principal) | Interest saved (Rs) | Tenure saved (months) |
| Rs 50 lakh | 20 | 8 | Rs 5 lakh | Rs 15.85 lakh | 49 |
| Rs 60lakh | 20 | 8 | Rs 6 lakh | Rs 19.01 lakh | 49 |
| Rs 70 lakh | 20 | 8 | Rs 7 lakh | Rs 22.18 lakh | 49 |
| Rs 80 lakh | 20 | 8 | Rs 8 lakh | Rs 25.36 lakh | 49 |
| Rs 90 lakh | 20 | 8 | Rs 9 lakh | Rs 28.53 lakh | 49 |
| Rs 1 crore | 20 | 8 | Rs 10 lakh | Rs 29.10 lakh | 49 |
Interest and tenure saved when you make more than one prepayment
If you don’t want to make a one-time payment equal to 10% of the principal amount, but prepay that amount in three equal instalments, you can still save Rs 14.51 lakh in interest and 46 months (3 years and 10 months) in tenure on the same Rs 50 lakh loan outstanding principal amount.
- Loan outstanding- Rs 50 lakh
- Outstanding tenure- 20 years
- Interest rate- 8%
- Prepayment amount- Rs 5 lakh (10% of principal in three equal instalments of Rs 1,66,666 each)
- Prepayment dates- 1st prepayment (April 2026), 2nd prepayment (April 2027), 3rd prepayment (April 2028).
- Interest saved- Rs 14.51 lakh
- Tenure saved- 46 months (3 years and 10 months)
Prepayment calculations for different amounts of loan (when prepayment is 10% of outstanding principal but made in 3 equal instalments)
| Outstanding principal amount | Outstanding tenure (years) | Interest rate (%) | Prepayment amount (in 3 instalments) | Interest saved (Rs) | Tenure saved (months) |
| Rs 50 lakh | 20 | 8 | Rs 5 lakh | Rs 14.51 lakh | 46 |
| Rs 60lakh | 20 | 8 | Rs 6 lakh | Rs 17.41 lakh | 46 |
| Rs 70 lakh | 20 | 8 | Rs 7 lakh | Rs 20.31 lakh | 46 |
| Rs 80 lakh | 20 | 8 | Rs 8 lakh | Rs 23.21 lakh | 46 |
| Rs 90 lakh | 20 | 8 | Rs 9 lakh | Rs 26.12 lakh | 46 |
| Rs 1 crore | 20 | 8 | Rs 10 lakh | Rs 29.01 lakh | 46 |
Interest and tenure saved when you pay one extra EMI each year
The third condition can be when you choose to prepay one extra EMI each year. On the same Rs 50 lakh outstanding principal amount, if you prepay one extra EMI each year, you can save Rs 10.17 lakh in interest and 3 years and 5 months (41 months) in tenure.
- Outstanding home loan principal amount- Rs 50 lakh
- Outstanding tenure- 20 years
- Interest rate- 8%
- Prepayment amount- one extra EMI of Rs 41,822 each year
- 1st extra EMI prepayment month- April 2026
- Interest saved- Rs 10.17 lakh
- Tenure saved- 41 months (3 years and 5 months)
Prepayment calculations for different amounts of loan (when you pay 1 extra EMI each year)
| Outstanding principal amount | Outstanding tenure (years) | Interest rate (%) | Extra EMI amount to be paid every year | Interest saved (Rs) | Tenure saved (months) |
| Rs 50 lakh | 20 | 8 | Rs 41,822 | Rs 10.17 lakh | 41 |
| Rs 60 lakh | 20 | 8 | Rs 50,186 | Rs 12.21 lakh | 41 |
| Rs 70 lakh | 20 | 8 | Rs 58,511 | Rs 14.24 lakh | 41 |
| Rs 80 lakh | 20 | 8 | Rs 66,915 | Rs 16.28 lakh | 41 |
| Rs 90 lakh | 20 | 8 | Rs 75,280 | Rs 18.31 lakh | 41 |
| Rs 1 crore | 20 | 8 | Rs 83,644 | Rs 20.34 lakh | 41 |
Refinancing of home loan
Refinancing is also a prominent way to save interest on your home loan. In refinancing, you choose a new lender which settles the dues of your loan with the existing lender and takes over the outstanding loan. A new lender can offer a lower interest if you have a good credit score such as 700+ with a good repayment record.
If you have Rs 50 lakh outstanding principal for 20 years at 8.5% interest rate, and new lender offers you a 7.5% interest rate, in 20 years, you can save Rs 7.47 lakh.
Interest saved on different amounts of home loans due to refinancing
| Outstanding principal amount | Outstanding tenure | Current interest rate | Interest rate after refinancing | Amount saved due to refinancing |
| Rs 50 lakh | 20 | 8.50% | 7.50% | Rs 7.47 lakh |
| Rs 60 lakh | 20 | 8.50% | 7.50% | Rs 8.96 lakh |
| Rs 70 lakh | 20 | 8.50% | 7.50% | Rs 10.45 lakh |
| Rs 80 lakh | 20 | 8.50% | 7.50% | Rs 11.95 lakh |
| Rs 90 lakh | 20 | 8.50% | 7.50% | Rs 13.44 lakh |
| Rs 1 crore | 20 | 8.50% | 7.50% | Rs 14.94 lakh |