Looking for the Cheapest Home Loan in 2025? Compare Interest Rates from SBI, PNB, Canara Bank & More

Cheapest Home Loan in 2025: As the Reserve Bank of India (RBI) recently reduced the repo rate, banks across India are now offering more affordable loan options—including home loans. With this change, several public sector banks have slashed their home loan interest rates by up to 50 basis points, giving borrowers a golden opportunity to reduce their EMIs and overall loan burden.

If you're planning to take a home loan soon, now is the perfect time to compare rates and secure the most cost-effective option. Here's a detailed comparison of which banks are currently offering the lowest home loan interest rates and what fees you can expect.

📉 Why Are Home Loans Getting Cheaper?

The repo rate—decided by the RBI—is the rate at which the central bank lends money to commercial banks. When the repo rate falls, banks in turn reduce their lending rates, especially RLLR-linked loans such as home loans. This directly benefits borrowers, as a lower interest rate means a lower EMI (Equated Monthly Installment) and less money paid over the loan’s tenure.

After the recent repo rate cut, several banks have revised their home loan offerings to attract new customers. Let's take a look at the updated interest rates.

🏦 Home Loan Interest Rates Comparison – June 2025

Bank	Starting Interest Rate (Per Annum)	Processing Fee
Union Bank of India	7.85%	0.50% of loan amount (Max ₹15,000 + GST)
Central Bank of India	7.85%	0.50% of loan amount (Max ₹20,000 + GST)
Bank of Maharashtra	7.85%	Contact bank for details
Canara Bank	7.90%	0.50% of loan (Min ₹1,500 to Max ₹10,000 + GST)
State Bank of India (SBI)	8.00%	0.35% of loan (Min ₹2,000 to Max ₹10,000 + GST)
Punjab National Bank (PNB)	8.00%	0.35% or ₹2,500 (whichever is higher), up to ₹15,000
Bank of Baroda	8.00%–9.50%	Starting from ₹5,000 (depends on loan type and amount)
Punjab & Sind Bank	8.15%	Contact bank for details
Bank of India	8.40%	Starting from ₹2,500 (depends on loan type and amount)

From the table above, Union Bank of India, Central Bank of India, and Bank of Maharashtra are offering the lowest interest rates starting at 7.85% p.a., making them highly competitive choices in the current market.

📑 Documents Required to Apply for a Home Loan

Before applying for a home loan, make sure you have the following documents ready:

• Filled loan application form (available at the bank or online)

• Passport-size photographs

• Identity proof (Aadhaar card, Voter ID, etc.)

• Address proof

• Last 6 months’ bank statements or passbook

• Banker’s verification of your signature

• Details of outstanding liabilities and personal assets

• Valuation details of your existing assets

• Form 16 or ITRs for the last 2 financial years

Having these documents in order ensures a smoother approval process and can speed up your loan disbursal.

🧐 Key Takeaways for Homebuyers

• Repo rate cuts by the RBI are making home loans cheaper in 2025.

• Banks like Union Bank, Central Bank, and Canara Bank are leading with competitive interest rates.

• SBI and PNB still offer reliable options with moderate rates and transparent processing fees.

• Always check the processing fees, as they can vary significantly based on the loan type and amount.

• Compare not just the interest rate but also the terms, service charges, and processing timeline before deciding.

✅ Conclusion

If you're looking to buy your dream home or invest in property this year, 2025 offers a favorable lending environment. With repo rates at a lower level and banks in a competitive race to attract borrowers, it’s a golden window for homebuyers to lock in the lowest interest rates.

Before applying, thoroughly compare offerings from different banks, evaluate your repayment capacity, and ensure all documents are ready. With proper planning, you could save lakhs over the loan’s lifetime.

Tags: Cheapest Home Loan 2025, Home Loan Interest Rate Comparison, SBI vs PNB Home Loan, Canara Bank Home Loan Rate, Best Home Loan Banks, Housing Loan EMI, RBI Repo Rate 2025, Affordable Housing Loan

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