Home loan rates are falling: Here's what borrowers need to know

Home loan interest rates are dropping faster than they have in years. The Reserve Bank of India has cut repo rates three times in 2025, bringing relief to millions of potential homeowners. This creates the best borrowing environment we have seen in recent memory.

With banks passing on these cuts to customers, your dream home is now within reach. Lower rates mean smaller monthly payments and bigger savings over time. Smart borrowers are already using a home loan calculator to see how much they can save.

Falling rates, rising opportunity

The RBI's latest 50 basis-point repo rate cut brings the rate to 5.50%. This marks the third consecutive reduction in 2025 and the largest single cut in over two years. Banks and NBFCs must pass these benefits to borrowers within weeks.

Home loans are now more affordable than they have ever been. A home loan interest rate reduction of even 0.5% can save lakhs over, say, a 20-year tenure. This presents a golden opportunity for both new and existing borrowers to benefit.

Why home loan rates are falling

The RBI has adopted an accommodative monetary policy to boost economic growth. With inflation under control and consumption slowing down, rate cuts become the preferred tool. The central bank expects further cuts in the current year.

Bajaj Finserv has positioned itself competitively in this low-rate environment with interest rates starting from 7.99% p.a. Their home loan eligibility calculator allows you to compare different scenarios easily.

What this means for borrowers

New borrowers enjoy lower EMIs from day one of their loan journey. Existing borrowers can reduce their monthly burden or shorten their loan tenure.

Key borrower benefits include:

• Lower EMIs: Monthly payments are reduced immediately with rate cuts. This frees up cash for other financial goals and improves your quality of life.
• Higher loan eligibility: Lenders approve larger amounts when rates are lower. Your income can now support a bigger loan for your dream home.
• Affordable long-term commitment: Lower rates make the 20-30 year comment more manageable. You can plan other investments alongside your home loan repayment.

Should you reduce EMI or loan tenure?

Both options have distinct advantages depending on your financial situation. Keeping EMIs unchanged and shortening your loan tenure can help you save significant interest over the loan period. This means you become debt-free faster. Most financial advisors recommend this approach when rates fall.

Reducing EMIs for monthly budget relief works well if you need extra cash for other expenses or investments. A home loan calculator can show you both scenarios clearly and help you understand exactly how much you can save in each case.

Bajaj Finserv offers flexibility to restructure your EMIs based on changing financial circumstances. Use their home loan calculator or contact their customer service team to understand the best option for your situation.

Using a home loan calculator

Understand different loan scenarios before applying with a home loan calculator. Enter your loan amount, expected interest rate, and tenure to see monthly EMI amounts. This tool also shows the total interest and total amount payable over the entire loan period.

By experimenting, you can see how different rates, amounts, or tenures affect your monthly budget. Bajaj Finserv provides an easy-to-use home loan calculator on their official website.

Introducing home loans from Bajaj Finserv

Bajaj Finserv provides home loans up to Rs. 15 crore with flexible tenure options of up to 32 years for comfortable EMI planning. Their interest rates start from 7.99% p.a. for eligible borrowers. Disbursal is quick - within 48 hours* of approval and helps you secure your dream property without delays.

*Terms and conditions apply

When to switch or top up

A top up home loan makes sense when your current lender offers poor rates or services. The right time to switch is when rate differences exceed 50 basis points. You should also consider switching if your current bank does not pass on RBI rate cuts fully.

Balance transfers work best early in your loan tenure when the interest component is higher. Avoid switching in the last few years when the principal component dominates your EMI. The outstanding amount should be substantial enough to justify the transfer costs.

Key benefits of transferring to Bajaj Finserv

Bajaj Finserv offers competitive home loan interest rates starting from 8.10% p.a. for balance transfers. Their top-up loan facility provides additional funds up to Rs. 1 crore without restrictions on usage.

The documentation process is smooth and hassle-free compared to traditional banks and a dedicated representative will guide you through every step of the transfer process.

Applying for a home loan from Bajaj Finserv

1. Click on 'APPLY' on the home loan page of the official website.
2. Enter your full name, mobile number, and employment type and select the type of loan you wish to apply for from the available options (fresh, balance transfer, and top-up).
3. Verify your phone number with an OTP.
4. Enter additional details, including your monthly income, required loan amount, and property identification status.
5. Provide your date of birth, PAN number, and other details based on your occupation type.
6. Submit your application and await contact from a Bajaj Finserv representative who will guide you through the remaining steps.

Eligibility criteria and documentation required

Tips for first-time borrowers

• Check your credit score regularly as better scores get significantly better rates. Address any errors or discrepancies before applying for your home loan.
• Keep your debt-to-income ratio below 40% for an optimal chance at approval. This includes all existing EMIs, credit card payments, and the proposed home loan EMI.
• Avoid breaking long-term investments for a down payment unless absolutely necessary.
• Choose your tenure wisely using a home loan EMI calculator to understand the long-term implications.

The current repo rate environment favours both new buyers and existing borrowers looking to refinance. With repo rates expected to fall further, acting now positions you advantageously. However, ensure your decision is based on genuine housing needs rather than just attractive rates.

Ready to make your move? Use the Bajaj Finserv Home Loan Calculator to check your EMI and explore home loan options today. Visit the official website or download the app to take the next step.

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