Bank of Baroda, one of India’s largest public sector banks, has announced a significant reduction in its home loan interest rate—now at 7.45% per annum, down from 7.50% in June. In a customer-friendly move aimed at boosting housing demand, the bank has also waived processing fees for new home loan borrowers .

What’s New?

• Interest rate now just 7.45% p.a. Reflects a 5 bps reduction from the June rate of 7.50%, which followed a larger cut from 8.00% .
• Processing fee waived: New applicants won’t have to pay the usual ₹8,500–₹25,000 charges, depending on loan size.

Why It Matters

1. EMI relief for borrowers:With home loan EMIs now pegged to a lower repo-linked rate, many customers will see immediate savings—either through reduced EMIs or shorter loan tenures at the next rate reset date.

2.Boost to credit growth and affordable housing: This move aligns with broader objectives to stimulate demand in the housing sector following the RBI’s cumulative repo rate cuts totaling 100 bps since February 2025, including a major 50 bps in June .

3.RBI policy transmission: Bank of Baroda’s rate changes reflect the RBI’s repo rate cuts and its strategy to pass those benefits directly to consumers.

Bank’s Perspective

Sanjay Mudaliar, Executive Director, stated:

We continue to work towards our commitment of making home ownership more accessible. This latest reduction… is aimed at supporting the aspirations of citizens and stimulating credit growth.

The move follows the bank’s June reduction from 8.00% to 7.50%, reinforcing its ongoing alignment with evolving monetary policy.

How to Apply

• Digital & branch channels: Borrowers can apply through Bank of Baroda’s website or visit any branch.
• Eligibility & terms: Final rates and fee waivers are subject to borrower’s credit score, loan amount, tenure, and documentation .

What This Means for You

• First-time homebuyers: Reduced interest and no processing fee make this an ideal time to enter the market.
• Existing floating-rate borrowers: Expect lower EMIs at the next reset—often quarterly.
• Affordable housing push: Timing aligns perfectly with RBI’s rate cuts and national credit growth goals.

Bottom line: With its latest rate cut to 7.45% and processing fee waiver, Bank of Baroda has made home loans more affordable than ever. If you’re planning to buy a house or refinance, now’s a prime window to act.

Stay updated with the latest news and alerts — follow us at racstar.in