Synopsis: With home loan rates easing after the RBI’s change, you now have a better chance to secure an affordable loan. This article lists the banks that offer lower interest rates in December 2025
Home loan interest rates are one of the biggest factors that decide how much you finally pay for your house. Even a minor change in the rate can reduce your EMI and your total interest cost. Last week on 8 December 2025, the Reserve Bank of India reduced the repo rate from 25 basis points to 5%.
Repo rate is the rate at which RBI lends money to banks. When the repo rate goes down, banks can borrow money at a lower cost. This usually leads to cheaper home loan rates for customers, which is good news for new borrowers.
Because of this rate cut, many banks like Punjab National Bank, have started adjusting their lending rates including home loans, making it more affordable this month to new borrowers. The other top banks have kept the same interest rates as per the past policy but they are expected to lower the rates soon to attract buyers.
Banks Offering the Lowest Home Loan Interest Rates in December 2025
1. State Bank of India
- Rate of Interest: 7.50% – 8.45% p.a.
- Tenure: Up to 30 years
- Approval: Based on the scheme, CIBIL Score and profile
State Bank is one of the largest property loan lenders in India.The bank has reduced its lending benchmark after the RBI cut, which has helped bring down its home loan pricing. The bank has listed several options to neglect the rate of rise under the undergoing effect for the borrowers:
- To Pay lumpsum amount to continue with existing EMI and Tenor.
- To Increase the Loan Tenor (within permissible tenor & Age limit).
- To Increase the EMI to pay the Loan within the existing tenor.
- Combination of any of the above
2. lCICI Bank
- Rate of Interest: 8.75% – 9.80% based on your credit score and the loan amount p.a. (valid till 31st December, 2025)
- Processing fee: 0.5% of the loan amount + taxes
- Tenure: 24-120 months and also offers full-term
- Approval: Based on monthly income, fixed monthly obligation, current age, retirement age
ICICI bank is also offering very competitive home loan rates in December 2025 with minimal documents and zero foreclosure charges. The bank has been focusing on affordable housing and gives preference to salaried customers with a strong repayment record, offering up to ₹10 crore for home loan.
3. Bank of Maharashtra
- Rate of Interest: Starting from 7.10% based on your CIBIL score
- Processing fee: 0.25% of the loan amount (Waiver process for govt. Or public sector employees in case of takeover loans)
- Tenure: Maximum 30 years or the borrower reaching 75 years whichever is earlier
- Approval: Loan amount is assessed on the basis of your Credit score
Bank of Maharashtra has gained attention because it reduced its home loan lending rate depending on their profile. The bank often keeps minimal charges, which helps reduce the overall cost of taking a home loan. For customers looking for low EMI and low processing expenses, Bank of Maharashtra is one of the strongest options right now.
4. Punjab National Bank
- Rate of Interest: 8.25% p.a. for salaried & 8.55% p.a. for self-employed people
- Processing fee: Low processing fee
- Tenure: Up to 30 years
- Approval: Loan amount is based on your CIBIL score (min. 611) and your monthly income (15,000 and above).
Punjab National Bank is another major public sector bank offering low starting home loan rates. The bank adjusts its rates based on credit score, loan amount and property location. It also offers doorstep services and post-disbursement services through their online porter. The applicants should be min. 21 years of age and should not exceed 70 years at the time of the loan maturity.
5. IDBI Bank
- Rate of Interest: 7.55%-11%
- Processing fee: Zero processing fee for cases of Pradhan Mantri Awas Yojna
- Tenure: Up to 30 years
- Approval: Loan amount is based on your age, qualification, income, number of dependents, spouse income, stability and continuity of your occupation, assets, liability base and your savings history.
Industrial Development Bank of India is offering home loans at rates similar to other leading public sector banks. The bank focuses on borrowers with stable job profiles and offers smoother approval for salaried customers. It offers home loans with the facility of additional funds as a top-up. Anyone with min. 22-25 years of age can apply and should not exceed 65-70 years based on the profession.
6. Canara Bank
- Rate of Interest: 7.40%-10.25%
- Processing fee: 0.50% (Min Rs.1500 + GST and Max. Rs.10,000 + GST) (waiver of 100% processing charges from October 2025 to 31 December 2025)
- Tenure: 30 years or the borrower reaching 75 years whichever is earlier
- Approval: Loan amount is based on your income.
Canara Bank’s home loan rates are slightly above the lowest bracket but still very attractive. Many borrowers choose Canara because the bank offers additional benefits for women borrowers and sometimes provides special festive rates. This makes it an excellent choice for families looking for long-term financial comfort. There is no upper limit on loan quantum.
7. Bank of Baroda
- Rate of Interest: 7.45% to 9.20%
- Processing fee: low processing fee
- Tenure: Up to 30 years
- Approval: Loan amount is based on your income
Bank of Baroda is offering home loan rates close to the lower end of the market. The bank often provides special rates based on credit score and loan type. Borrowers also prefer BOB because of its smooth digital loan journey, which makes the process faster. Both resident and non-resident Indians between 21 – 70 years are eligible for BOB home loans.
8. Axis Bank
- Rate of Interest: 8.35%-9.10% based on your CIBIL score
- Processing fee: Up to 1% of the loan amount or ₹10,000 + GST (whichever is higher)
- Tenure: Up to 30 years
- Approval: Loan amount is based on the customer’s profile, loan variant and credit score
Axis Bank Home loans are customised according to your needs, They offer loans ranging from Rs 3 lakh to Rs 10 crore. They do not charge any pre-payment charges or floating rate home loans and through their portal you can easily manage your loan from the comfort of your home.
9. HDFC Bank
- Rate of Interest: 7.90% to 13.20%
- Processing fee: For a salaried person – Up to 0.50% of the loan amount or Rs. 4,000 + Taxes whichever is higher, for a self-employed person – Upto 1.50% of the loan amount or Rs. 5,000 +GST whichever is higher.
- Tenure: Up to 30 years
- Approval: Loan amount is based on your income and repaying capacity.
The home loan rates for HDFC bank are marked with the policy repo rate 5.50%. The bank offers a 10% discount to senior citizens on all the service charges. The applicant must be an Indian resident with stable income of the age range between 18-70 years.
Also Read: Low CIBIL Score? Here are 6 Best Loan Apps That Give Loans (2026)
Conclusion
If you are planning to take a home loan, comparing interest rates in December 2025 can help you make a smart financial decision. Before choosing a loan, always check your credit score, understand the processing fees and compare the total cost across banks. A little research can help you secure a more affordable EMI for many years.
FAQs
1. Which bank has the lowest home loan rate in December 2025?
Bank of Maharashtra is currently offering the lowest starting rates this month.
2. Do private banks have cheaper rates?
Not always. In December 2025, many public sector banks are offering lower starting rates than private banks.
3. Does my credit score affect the rate?
Yes. A higher credit score usually helps you get a lower interest rate.
4. Should I compare processing fees?
Yes. Some banks offer low rates but charge higher processing fees, which increases your total cost.
Written By Supriya
