HDFC Bank reduced interest rates before Diwali, find out how much the MCLR has decreased and how much your EMI will decrease...

HDFC Bank MCLR Cut: Just before the festive season, HDFC Bank has provided significant relief to its customers. The bank has reduced its Marginal Cost of Funds-Based Lending Rates (MCLR). This means that EMIs for home loans, auto loans, and personal loans will be slightly lower. The bank has reduced MCLR rates by 5 to 15 basis points (bps) for different tenures. These new rates are effective from October 7, 2025. After the reduction, the bank's new MCLR rates range between 8.45% and 8.65%.

How much has the MCLR decreased?

According to the latest rates released on the bank's website, HDFC Bank's overnight MCLR is now 8.45%, up from 8.55% previously. The 1-month MCLR has been reduced to 8.40%, while the 3-month MCLR has been reduced by 15 basis points and now stands at 8.45%. The bank has reduced the 6-month and 1-year MCLR by 10 basis points each, bringing the rates to 8.55%. The 2-year MCLR is now 8.60% (previously 8.70%), and the 3-year MCLR is 8.65% (previously 8.75%).

How much relief has been received compared to the previous year?

Previously, the bank's MCLR range was 8.55% to 8.75%, which has now been reduced to 8.45% to 8.65%. This means a maximum relief of 15 basis points (0.15%) has been provided.

For home loan or personal loan borrowers, this means a slight reduction in EMIs. For example, a 0.15% reduction in the interest rate on a home loan of ₹50 lakh can result in savings of approximately ₹400–₹600 per month.

What is MCLR?
MCLR (Marginal Cost of Funds-Based Lending Rate) is the minimum interest rate at which a bank can lend to a customer. It was introduced by the Reserve Bank of India (RBI) in 2016 to bring transparency to interest rates. When a bank's funding costs decrease or liquidity in the system increases, the bank reduces the MCLR. Based on this, the EMI of floating rate loans (such as home loans, business loans, etc.) also increases or decreases.

No Change in Base Rate and Benchmark PLR
HDFC Bank has not yet made any changes to its Base Rate and Benchmark PLR (Prime Lending Rate). The bank's base rate remains at 8.90%, while the BPLR is 17.40% per annum. Both rates were last updated on September 19, 2025.

How much interest is charged on home loans?
HDFC Bank's home loan interest rates are linked to the RBI's repo rate. According to the bank's website, until October 7, 2025, rates for salaried and self-employed customers range from 7.90% to 13.20%. The bank calculates these rates using the repo rate + 2.4% to 7.7% formula.

Extended relief ahead of the festive season
If your loan is linked to HDFC Bank's MCLR, your EMI will automatically decrease on the next reset date. However, if your loan is on a repo-linked rate, this change will not affect it. Market experts say that during the festive season, the banking sector provides relief in interest rates to attract customers, so that the demand for home, auto, and personal loans increases.

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