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BoB Home Loan Rates | RBI Repo Rate Cut | EMI Benefits

The Reserve Bank of India (RBI) delivered major relief for borrowers on December 5, 2025, when the Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points, bringing it down from 5.50% to 5.25%. Soon after the announcement, Bank of Baroda (BoB) lowered its Benchmark Retail Loan Lending Rate (BRLLR), offering significant relief to home loan customers.

The revised rates have come into effect from 6 December 2025.

🔻 How Much Has BoB Reduced Its Rates?

As per BoB’s BSE filing:

• Old BRLLR: 8.15%

• New BRLLR: 7.90%

This 25 bps reduction will directly reduce home loan EMIs for existing and new customers.

🔻 Total RBI Rate Cuts in 2025

So far in 2025, RBI has implemented:

• February: 25 bps

• April: 25 bps

• June: 50 bps

• December: 25 bps
  Total: 125 basis points of reduction

There was no change in the October review, making this December cut even more impactful.

🔻 Why Will EMIs Become Cheaper Now?

Whenever the RBI lowers the repo rate, banks revise lending rates accordingly.
With BoB cutting its BRLLR, home loan interest rates will drop, reducing the monthly EMI burden.

Customers linked to EBLR benefit the most

Borrowers with loans tied to the External Benchmark Linked Rate (EBLR) will see:

• The fastest rate transmission

• Immediate reduction in EMI or shortening of loan tenure
  (The bank allows borrowers to choose between these two benefits.)

🔻 What About MCLR, Base Rate, and BPLR Customers?

Many older home loan accounts are still linked to:

• MCLR

• Base Rate

• BPLR

In these systems, interest rate changes are slower.
However, since the RBI has been consistently cutting rates:

• These borrowers will also see a reduction

• The impact will appear gradually over the coming months

🔻 EMI Reduction or Tenure Reduction — Which Is Better?

Experts strongly recommend:

✔ Reducing the loan tenure instead of EMI

Because:

• Total interest payout drops significantly

• The loan closes much sooner

• Long-term savings are much higher

Borrowers struggling with monthly budgets may choose EMI reduction instead.

🔻 Other Banks Likely to Cut Rates Soon

With BoB setting the trend, it is expected that major banks like:

• SBI

• HDFC Bank

• ICICI Bank

• Punjab National Bank

• Other public and private lenders

will also revise their lending rates downward.
If this happens, home loan borrowers across the country will receive substantial financial relief.