Bank of Baroda (BoB) has announced a reduction in its home loan interest rates, now starting at 7.45% per annum. This move, effective immediately, also includes a waiver of processing fees for new home loan applicants. The rate cut follows an earlier reduction in June, when the bank lowered its rates from 8.00% to 7.50%.

This decision comes in the wake of the Reserve Bank of India's (RBI) recent monetary easing, which has seen the repo rate lowered by 100 basis points (bps) since February 2025. The current reduction is a further 5 basis points. The RBI's repo rate actions directly impact home loan interest rates that follow Repo Linked Lending Rates (RLLR), an external benchmark. A lower repo rate translates to a lower RLLR, meaning consumers pay less interest over the loan term.

Sanjay Mudaliar, Executive Director at Bank of Baroda, stated that this reduction aims to support citizens' aspirations and stimulate credit growth. The offer is applicable to new borrowers, with specific terms and conditions available on the bank's website.

This rate cut positions Bank of Baroda among lenders passing on the benefits of lower borrowing costs to consumers. Other banks, including Punjab National Bank, State Bank of India, and Indian Bank, have also cut interest rates on home loans in response to the RBI's rate cuts.

For borrowers with floating-rate home loans linked to the repo rate or other external benchmarks, this rate cut will translate to reduced Equated Monthly Instalments (EMIs), either immediately or on the loan's next reset date. The reduction in interest rates and the waiver of processing fees are expected to make homeownership more accessible, particularly for first-time buyers.

Bank of Baroda also offers digital and in-branch application options to simplify and accelerate the loan application process. The bank serves over 165 million customers globally and operates across 17 countries.

While Bank of Baroda has reduced home loan rates, Punjab National Bank's (PNB) Repo Linked Lending Rate (RLLR) has increased from 8.15% to 8.25% effective July 1, 2025. However, PNB also decreased its Bank Spread (BSP) from 0.20% to 0.10%, balancing the overall impact on the interest rate for many customers.

Bank of Baroda revised its Marginal Cost of Funds-based Lending Rate (MCLR) on June 6, 2025, and is scheduled to update the rates again on July 12, 2025.