Public vs private banks: Which of these offers the cheapest home loans now after RBI's 50 bps repo rate cut?

In a major relief for home loan borrowers, the Reserve Bank of India (RBI) in early June reduced the repo rate by 50 basis points (bps). This marks the third rate cut by the central bank this year, bringing the cumulative reduction by the central bank to 100 bps in just the first half of the year.

The repo rate, the interest rate at which the RBI lends to banks, plays a crucial role in determining lending rates across the banking sector. With the recent reduction, home loan interest rates are expected to fall further, leading to lower equated monthly instalments (EMIs) or shorter loan tenures for borrowers.

If your home loan is tied to the repo rate, you can expect a noticeable reduction in your interest payments in the months ahead. Many banks have already started revising their repo-linked lending rates; further adjustments are expected after the latest rate cut.

SBI cuts lending rates after RBI repo rate revision: Check latest interest rates

Here’s a look at the latest home loan interest rates from leading banks following the RBI’s June repo rate cut:
The interest rates are expressed as a range reflecting variations based on factors like borrower credit profile, loan tenure, and bank policies. The table gives you a comparison of lending practices among 12 public sector banks (PSBs) and 13 private sector banks.

Public sector banks home loan interest rates

Private sector banks home loan interest rates

Source: Paisabazaar data as on June 11, 2025

Home loan EMIs to fall: Canara Bank, Union Bank, Indian Overseas Bank cut lending rates after RBI repo rate cut

Borrowers should consider processing fees, prepayment penalties, loan tenure, and customer service. Public sector banks generally charge lower fees but have slower processing times, while private banks offer faster approvals but at a higher cost.