Home Loan Rates Drop Below 7.5%: Check Which Bank Offers the Lowest EMI on ₹50 Lakh Loan

The Reserve Bank of India’s (RBI) decision to reduce the repo rate by 50 basis points on June 6, 2025, has brought a wave of relief for home loan borrowers. Following this cut, several banks have slashed their lending rates, making new home loans cheaper than before. But the question many borrowers are asking is: which bank offers the lowest EMI on a ₹50 lakh home loan over a 20-year tenure, and which will cost you more in the long run?

Public Sector Banks Lead with the Cheapest Rates

Among government-owned banks, Canara Bank and Union Bank of India are currently offering the lowest starting interest rate of 7.3%. For a 20-year home loan of ₹50 lakh, the EMI comes to approximately ₹39,670 per month. This makes them the most attractive choice for borrowers looking to minimize their monthly outflow.

Bank of Baroda follows with a starting rate of 7.45%, resulting in an EMI of around ₹40,127 for the same loan amount and tenure. While slightly higher than Canara and Union Bank, it remains competitive among public sector banks.

State Bank of India (SBI) and Punjab National Bank (PNB) are offering home loans starting at 7.5% interest, translating into an EMI of ₹40,280 for a ₹50 lakh loan over 20 years. This reflects the average rate for most government banks in the current scenario.

Private Banks Offer Convenience at a Premium

Private banks, while known for quicker processing and flexible services, are comparatively costlier:

• HDFC Bank: Starting at 7.9%, the EMI for ₹50 lakh over 20 years is ₹41,511.

• Kotak Mahindra Bank: Starts at 7.99%, resulting in an EMI of ₹41,791.

• ICICI Bank: Slightly higher at 8%, with an EMI of ₹41,822.

While these rates are not drastically higher, borrowers end up paying significantly more over a 20-year period due to the compounding effect of interest.

High-End Private Bank Rates

Some private lenders are still offering home loans at noticeably higher rates:

• Axis Bank: Begins at 8.35%, with a monthly EMI of ₹42,918.

• Yes Bank: Tops the list with 9%, resulting in an EMI of ₹44,986 for the same loan amount and tenure.

These differences in EMI, even if they appear small monthly, can add up to lakhs of rupees in additional interest over two decades.

Key Takeaways for Borrowers

Public sector banks currently offer the lowest home loan rates, with EMIs under ₹40,000 for a ₹50 lakh loan.

Private banks charge higher rates but may provide faster approvals and additional flexibility.

Even a 0.2% to 0.5% difference in interest rate can lead to a significant change in total interest paid over 20 years.

Borrowers should consider total interest outgo, processing fees, and prepayment options before finalizing a loan.

Bottom Line

With home loan interest rates dipping below 7.5%, this is an opportune time for new borrowers and for existing borrowers to explore refinancing options. For those seeking the lowest possible EMI, Canara Bank and Union Bank of India emerge as the best choices, while Yes Bank remains the costliest in the current market. Comparing rates before committing to a long-term loan can save you substantial money over the life of your home loan.