RBI Repo Rate Cut 2025: How Bank MCLR, RLLR and RBLR Cuts Can Reduce Your Home Loan EMI

Rashi Sood

Last Updated on 15th December 2025

After the RBI cut the repo rate by 25 basis points to 5.25% on December 5, 2025, a few major lenders have started passing on the benefit by reducing lending benchmarks like MCLR (internal benchmark) and repo-linked rates (RLLR/RBLR/BRLLR). For home loan borrowers, this can show up as a lower EMI or a shorter tenure (often depends on how your bank applies the reset).

What Banks Have Cut so Far?

Bank	Benchmark cut	New rate (reported)	Effective/notes
HDFC Bank	MCLR	8.30% to 8.55% (range by tenure)	Cut by up to 5 bps; reflects on next reset for MCLR-linked loans
Punjab National Bank (PNB)	RLLR	8.10% (incl. BSP of 10 bps)	Effective Dec 6, 2025
Bank of Baroda	BRLLR	7.90%	Cut from 8.15%
Indian Bank	RLLR	7.95%	Effective Dec 6, 2025
Bank of India	RBLR	8.10%	Effective Dec 5, 2025
Bank of Maharashtra	Home loan rate	7.10%	Cut from 7.35%; bank also mentioned a processing fee waiver

Source: MSN

Why do Some People Get the Benefit Faster Than Others?

If your loan is linked to a repo-based benchmark (RLLR/RBLR/EBLR style), the pass-through is usually quicker. If it’s linked to MCLR, you typically see the change on your reset date, not instantly.

EMI Impact: A simple Example (25 bps cut)

Loan Example	Before	After (25 bps lower)	Difference
₹50 lakh, 20 years	8.50% → EMI ₹43,391	8.25% → EMI ₹42,603	~₹788/month lower

How Does this Matter for Homebuyers?

Slightly Better Affordability: Even a small rate move can improve monthly cash flow, especially on larger loans.
Improved Eligibility for Some Borrowers: Lower rates can marginally lift eligibility in lender calculators (varies by bank and profile).
Good Time to Compare Offers: When banks start cutting benchmarks, the “starting rate” gap between lenders can widen. That’s when processing fees, spreads, and reset rules start to matter as much as the headline rate.

Suggested read: Repo Rate Impacts Your Home Loan

FAQs about RBI Repo Rate Cut 2025

How does the RBI repo rate cut affect home loan EMIs?

A repo rate cut generally reduces interest on floating-rate home loans, especially those linked to an external benchmark (repo/EBLR), so your effective rate drops at the next reset, and either your EMI comes down, or your tenure shortens. Fixed-rate home loans usually don’t change just because the repo rate changed.

What is the difference between MCLR-linked and repo-linked (RLLR/RBLR) home loans after a rate cut?

MCLR-linked loans are tied to the bank’s internal cost of funds, so the benefit of a repo cut can be slower and smaller (banks may or may not cut MCLR quickly). Repo-linked (RLLR/RBLR/BRLLR/EBLR) loans are tied to an external benchmark and, as per RBI’s external-benchmark framework, the rate must be reset at least once every 3 months, so repo cuts typically transmit faster (subject to your reset date and the bank’s spread).

When will banks pass on the benefit of the December 2025 repo rate cut to borrowers?

For the December 5, 2025 repo rate cut (to 5.25%), banks will pass on the benefit to repo-linked borrowers at their next reset, which, by design, should be no later than the next 3-month reset cycle (many banks also revise their repo-linked benchmark within days). For MCLR-linked borrowers, you’ll typically see it only after the bank cuts MCLR and your loan hits its next reset, which can take longer depending on your reset frequency.

Which banks have reduced home loan benchmark rates after the RBI repo rate cut?

Banks reported to have reduced home-loan benchmarks after this cut include: PNB (RLLR cut effective Dec 6, 2025), Bank of Baroda (BRLLR to 7.90% w.e.f. Dec 6, 2025), Bank of India (RBLR cut effective Dec 5, 2025), Indian Bank (repo-linked benchmark cut effective Dec 6, 2025), and HDFC Bank (MCLR cut). Other lenders may follow or may have made smaller adjustments.

Will my EMI reduce automatically, or will my loan tenure change instead?

Whether your EMI reduces automatically or your tenure changes instead depends on your bank and your loan’s terms. Many lenders keep the EMI the same and adjust the tenure when rates move, but borrowers can often request a switch (lower EMI vs shorter tenure), subject to the bank’s policy and reset rules.