Bank of India cuts home loan interest rates following RBI’s repo rate reduction

Bank of India: The lender has even lowered interest rates by 25 bps across select existing retail loan products, including car loans, personal loans, loans against property, education loans, and Star reverse mortgage loans.

Home Loan Rate Now at 7.90% p.a.

State-owned Bank of India (BoI) has announced a 25 basis points (bps) cut in home loan interest rates, effective April 15, for both new and existing customers. With this revision, home loan rates now stand at 7.90% per annum, subject to the borrower’s CIBIL score.

Wider Cuts Across Retail Loan Products

Alongside home loans, BoI has also reduced interest rates by 25 bps on several other retail loan products, including:

• Vehicle loans
• Personal loans
• Loans against property
• Education loans
• Star reverse mortgage loans

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This move is aimed at making credit more affordable and supporting broader financial accessibility for consumers.

In Response to RBI’s Policy Shift

The rate cut comes on the heels of the Reserve Bank of India’s (RBI) April monetary policy, which saw the repo rate reduced by 25 bps and the policy stance shifted from ‘neutral’ to ‘accommodative’. This marks the second consecutive rate cut, following a similar move in February—the first in five years.

Repo-Linked Lending: Faster Transmission

As mandated, all floating-rate retail loans sanctioned after October 1, 2019, are linked to an external benchmark, typically the repo rate. This ensures quicker and more transparent transmission of rate cuts. With two successive repo rate reductions totaling 50 bps, existing borrowers stand to benefit from significant savings in their loan repayments.