Buying a Home Just Got Cheaper: Home Loan Interest Rates Drop Below 8%, EMI on ₹30 Lakh Loan Now More Affordable

📉 RBI Cuts Repo Rate – Homebuyers Rejoice

If you’ve been dreaming of owning your own home, now might be the best time to act. In 2025, the Reserve Bank of India (RBI) has slashed the repo rate from 6.5% to 6%, marking a 50 basis points cut so far this year. After years of rate hikes and stagnant lending costs, this move is a significant relief for home loan borrowers.

As a result, home loan interest rates have fallen below 8%, making monthly EMIs lower and home ownership more affordable than before.

🏦 Lowest Floating Home Loan Rates in May 2025

As of 9 May 2025, several public sector banks are offering floating-rate home loans at sub-8% interest. However, these attractive rates are subject to borrower eligibility, including credit score, income level, and property valuation.

Here's a look at some of the lowest EMI offers for a ₹30 lakh loan with a 20-year tenure:

Bank Interest Rate Approx. EMI (₹)

Canara Bank	7.80%	24,721
Bank of Maharashtra	7.85%	24,814
Central Bank of India	7.85%	24,814
Union Bank of India	7.85%	24,814
Indian Bank	7.90%	24,900
Indian Overseas Bank	7.90%	24,900
Bank of Baroda	8.00%	24,990
Bank of India	8.00%	25,080
SBI (State Bank of India)	8.00%	25,080
Punjab National Bank (PNB)	8.00%	25,080

💡 What Affects Your Home Loan EMI?

While interest rates are the biggest factor, your EMI is also impacted by:

• Credit Score: A score above 750 increases your chances of getting lower interest.

• Loan Type: Floating rate loans adjust with market changes, while fixed-rate loans stay constant.

• Loan Amount: Higher loan amounts might carry slightly higher interest rates.

• Property Location: Homes in prime locations with better resale value can help negotiate lower rates.

• Benchmark Rate: Repo rate and other external benchmarks set by RBI influence your bank's lending rate.

🏠 Why This Is a Great Time to Buy

With interest rates dipping below 8%, EMIs for home loans have become lighter, making it easier for middle-class families to finally own a home. Whether you’re buying your first flat or upgrading to a larger property, the reduced cost of borrowing in 2025 gives you more purchasing power.

🔍 Final Thoughts

This drop in repo rate by the RBI marks a turning point for aspiring homeowners. With many banks responding by lowering their interest rates, it's an ideal time to reassess your finances and make the move toward homeownership.

Pro Tip: Always compare offers from multiple banks and consider your long-term repayment capacity before finalizing a home loan.