September 2025 Home Loan Rates: From SBI To Private Lenders, What Borrowers Should Know

Buying a home has just become easier for many Indians as home loan rates continue to soften, following a series of repo rate cuts earlier this year. With the Reserve Bank of India (RBI) keeping the repo rate unchanged at 5.5% in its latest Monetary Policy Committee meeting, prospective homebuyers are benefiting from more affordable financing. According to experts, this favourable lending environment is encouraging more families to take the plunge into property ownership, as reduced EMIs make housing loans more manageable.

RBI Policy Brings Relief To Borrowers

The RBI’s decision to hold the repo rate steady after multiple cuts has provided stability for borrowers. Lower repo rates translate into lower lending rates by commercial banks, making monthly instalments less burdensome. For buyers aiming to secure long-term housing finance, this comes as a major positive development.

How Interest Rates Are Shaping Up

At present, public sector banks are offering some of the most competitive home loan rates in the market. The State Bank of India is providing loans at rates between 7.5% and 8.7%, while the Bank of Maharashtra has one of the lowest starting rates at 7.35%. Similarly, the Bank of Baroda and Punjab National Bank are offering rates beginning at 7.45%.

Private sector lenders are also active in this space. HDFC Bank’s home loans start at 7.9%, while ICICI Bank is offering rates from 7.7%. Axis Bank, however, is on the higher side, with interest rates ranging between 8.75% and 9.15%. Some smaller banks, including Suryoday Small Finance Bank, have interest rates going up to 13%, depending on the applicant’s profile and loan terms.

Key Factors Affecting Eligibility

While reduced rates are an attractive prospect, eligibility criteria still play a crucial role. Banks generally assess an applicant’s credit history and CIBIL score to determine financial discipline. Stable monthly income and employment proof remain essential conditions. Many lenders also offer flexible repayment tenure of up to 30 years, giving borrowers greater freedom in managing their repayments.

Location is another factor, with higher loan amounts often sanctioned for properties in major metropolitan cities such as Mumbai, Bengaluru and Delhi, compared to smaller towns. Younger borrowers may also find it easier to qualify for larger loan tenures.

Competition Among Banks Benefits Homebuyers

The cut in repo rates has triggered intense competition among lenders. Both public and private banks are trying to attract new borrowers with better interest rates and customer-friendly schemes. This has created a favourable market for homebuyers, where affordability and choice go hand in hand.

Experts point out that borrowers should compare different offers before finalising their loan, since even a small difference in rates can lead to significant savings over a long tenure. Additionally, understanding processing fees, prepayment charges and hidden costs is crucial to avoid overpaying.

Why This Matters For Homebuyers

For families aspiring to own a home, the timing appears favourable. Lower EMIs reduce the financial strain of long-term loans, allowing households to manage other expenses more effectively. According to experts, the current trend may continue for some time, but borrowers should act while rates remain competitive, as future monetary policy shifts could alter the lending environment.

The Indian housing market is witnessing a revival in affordability, thanks to RBI’s consistent rate cuts and competitive offerings by banks. For homebuyers, this is a rare opportunity to lock in loans at relatively lower interest rates, providing long-term benefits.

Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Home loan decisions should be made after consulting financial experts and assessing personal financial conditions.