New Delhi, June 7: Buying a home remains a significant dream for many, but rising property prices make it challenging without a home loan. For those planning to purchase a home, interest rates on loans are a primary concern. In June 2026, prospective homebuyers received good news as the Reserve Bank of India (RBI) maintained the repo rate at 5.25%. This decision alleviates the burden of increased EMIs for home loans in the near future.
The repo rate is the interest rate at which the RBI lends money to commercial banks. An increase in the repo rate raises the cost of funds for banks, affecting loan interest rates and EMIs. However, the RBI has opted for no changes this time, keeping its policy stance neutral. This stability is a relief for both existing home loan customers and new borrowers, as the likelihood of rising EMIs appears low.
Several public sector banks are offering competitive interest rates on home loans. The State Bank of India (SBI) has rates starting from 7.25% and going up to 9.05%. Bank of Baroda offers loans between 7.20% and 9.25%. Both the Central Bank of India and Bank of India have starting rates at 7.10%. Union Bank of India starts its loans at 7.15%, while Canara Bank begins at 7.25%. Indian Overseas Bank is providing home loans at an initial rate of 7.10% for salaried customers.
Private sector banks are also in the competitive fray. ICICI Bank offers home loans starting at 7.50%. Kotak Mahindra Bank has rates beginning at 7.60%, while HDFC Bank starts at 7.75%. Axis Bank’s rates range from 8% to 11.90%, depending on the customer’s profile and eligibility.
Experts advise that when selecting a home loan, borrowers should not focus solely on interest rates. Factors such as processing fees, pre-payment and foreclosure charges, loan tenure, credit scores, and other terms significantly impact the total cost. Sometimes, a loan with a slightly higher interest rate may offer better features and lower additional fees, proving to be more beneficial.
If you plan to buy a home soon, compare interest rates and terms from various banks. Additionally, maintain a strong credit score, as customers with better credit histories often qualify for lower interest rates. With the RBI’s decision to keep the repo rate steady, the home loan market currently shows stability, providing relief to those looking to purchase homes.
Disclaimer: Home loan interest rates may change periodically and depend on the customer’s profile, income, credit score, and bank policies. Always check the official information from the relevant bank before making any financial decisions.
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