There is some good news for those who dream of buying a house. Bank of India has decided to reduce interest rates for its borrowers. This means that now borrowing is going to be a little cheaper and your EMI may also be a little lighter.
From August 1, 2025, the bank has slightly reduced its MCLR i.e. Marginal Cost of Funds based Lending Rate. This rate is the minimum interest charged on loans given by the bank. Your interest is calculated by adding a little ‘margin’ to it. That is, if MCLR is reduced, the chances of your interest also decreasing increase.
According to these new changes, the bank’s overnight MCLR has now become 7.95%, which was earlier 8.10% — that is, a reduction of 0.15%. While the one-year MCLR has also become 8.90%, which was earlier 9.00%, that is, a discount of 0.10%. Looking at these figures, the interest rates of loans that are used more have been discounted.
Most of the customers who take home loans, personal loans or auto loans have their loans linked to the one-year MCLR rate. Therefore, the change in this rate directly affects the EMI. That is, those whose loans are on a floating rate and their reset date is approaching can immediately benefit from this new rate. Those who are new customers will also be able to take loans at a lower interest rate.
This news is also important for those who have already taken a home loan. Even getting a discount of even 0.10% in interest can save thousands of rupees over a loan tenure of 20 to 25 years. For example, if you have taken a loan of Rs 50 lakhs and the interest rate is reduced a little, the burden of EMI will definitely be light in the long run.
The rest of the MCLR rates have not changed much. The MCLR for one, three and six months as well as three years has been kept the same. Therefore, short-term borrowers will not feel much difference. But this opportunity is definitely worth considering for long-term home loans.
Many people are currently facing inflation. At such a time, cheaper loans are a good thing. This can be a good time for those who dream of buying a house or a car. If the EMI is going to be reduced, it seems a little easier to make a decision.
It will be interesting to see whether other banks will also reduce rates due to this step by Bank of India. But for those who currently have a loan with this bank or want to take it, this is good news. Check the EMI figures, perhaps this change will make your financial calculations a little easier.
