CIBIL Score Now Determines Home Loan Rate: LIC Housing Finance Cuts Interest Rates

Homebuyers have received a welcome relief as LIC Housing Finance has reduced interest rates on new home loans to 7.15%, effective from 22 December 2025. The move comes after the RBI’s recent repo rate cut, making home loans more affordable, especially for those with good credit scores.

RBI Rate Cut and Its Impact

The Monetary Policy Committee (MPC) of the Reserve Bank of India recently reduced the repo rate by 25 basis points. This has led banks and housing finance companies to lower interest rates, and LIC Housing Finance’s announcement aligns with this trend. According to the company, this reduction will boost homebuyer confidence and make housing more affordable.

Interest Rates Tied to CIBIL Score

Now, home loan interest rates will be directly linked to the borrower’s CIBIL score:

• CIBIL Score 825 or above: 7.15% (for loans up to ₹5 crore)

• CIBIL Score 700–724: 7.95% to 8.25%

• CIBIL Score below 600: 9% to 10% or higher, depending on loan amount

This clearly shows that a higher credit score translates to a cheaper home loan.

LIC vs SBI: Which is Better?

• LIC Housing Finance: Starts at 7.15%, ideal for borrowers seeking simple, low-rate home loans.

• SBI: Standard home loans start at 7.25%, slightly higher, but offers more flexible options like Maxgain overdraft loans, top-up loans, and property-backed loans. SBI’s rates can go up to 8.45% or more depending on the scheme.

Who Should Choose Which?

• If your CIBIL score is strong and you want a straightforward, low-rate home loan, LIC Housing Finance is a better option.

• If you need flexible loan structures or multiple banking options, SBI remains a strong contender.

In summary, with interest rates coming down, LIC Housing Finance’s move is a significant relief for those planning to buy their dream home in the near future.