Bank of Baroda Slashes Home Loan Interest Rate
Bank of Baroda has announced a further reduction in its home loan interest rate by 5 basis points, bringing the rate down to 7.45% per annum, effective immediately in 2025. This move follows an earlier cut in June 2025 from 8.00% to 7.50%. To enhance affordability and spur home loan demand, the bank has also waived processing fees for new borrowers.
Key Details of the Interest Rate Cut
The new home loan interest rate is 7.45% p.a., one of the most competitive rates offered by a public sector bank.
The waiver of processing fees reduces upfront loan costs, making home ownership more accessible.
These reductions align with multiple cuts in the Reserve Bank of India's policy repo rate since February 2025, which banks are passing on to consumers.
The rate cut applies to fresh home loan borrowers and is aimed at supporting citizens' housing aspirations, especially in a market seeking more affordable financing options.
| Feature | Details |
|---|---|
| New Interest Rate | 7.45% per annum |
| Previous Rate | 7.50% per annum (June 2025 cut) |
| Processing Fees | Waived for new loans |
| Effective Date | Immediate, July 2025 |
| Applicable Loans | Fresh home loans |
Benefits to Borrowers
Lower EMIs or Shorter Tenure: Borrowers can opt to reduce their EMI burden or shorten the loan tenure while maintaining the same EMI.
Affordable Housing Finance: Reduced rates ease monthly payments, encouraging more homebuyers to enter the market.
Simplified Loan Process: With waived processing fees and digital application options, the loan journey is more seamless.
Bank of Baroda’s Executive Director Sanjay Mudaliar stated the rate cut is part of the bank’s commitment to supporting consumer credit growth and extending the benefits of RBI rate cuts to customers.
Frequently Asked Questions
What is Bank of Baroda’s new home loan interest rate?
The home loan interest rate has been reduced to 7.45% per annum as of July 2025.
Are there any processing fees for new home loans?
No, Bank of Baroda has waived processing fees for new home loan borrowers to reduce upfront loan costs.
Who is eligible for this new reduced interest rate?
The reduced rate applies to new home loan applicants from Bank of Baroda.
How does this rate cut benefit existing borrowers?
Existing borrowers can benefit at their loan reset dates, typically quarterly, by opting for revised EMI or tenure based on the new rate.
Why is Bank of Baroda reducing home loan rates now?
This follows RBI’s repo rate cuts in 2025, and the bank aims to pass on the benefits to customers while boosting home loan demand.
Published on: July 27, 2025
Published by: PAVAN
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