HDFC Bank Reduces MCLR: Relief for Millions of Borrowers as Home Loan EMIs Likely to Fall

🏦 Major Relief for HDFC Bank Customers

In a welcome move for millions of its borrowers, HDFC Bank, India’s largest private sector bank, has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) by 0.10%. This change, effective from November 7, 2025, is expected to lower home loan EMIs, bringing financial relief to existing and new customers alike.

HDFC Bank reviews and revises its MCLR rates on the 7th of every month, and this time, the downward revision has made borrowing slightly more affordable for various loan tenures.

📉 Updated MCLR Rates

After the latest revision, HDFC Bank’s MCLR now ranges between 8.35% and 8.60%, compared to the earlier range of 8.45% to 8.65%. This means borrowers will now benefit from a reduction of 5 to 10 basis points (bps), depending on their loan tenure.

Here’s a look at the new and old MCLR rates across different time periods:

Tenure New MCLR (Effective Nov 7, 2025) Old MCLR (Effective Oct 7, 2025)

Overnight	8.35%	8.45%
1 Month	8.35%	8.40%
3 Months	8.40%	8.45%
6 Months	8.45%	8.55%
1 Year	8.50%	8.55%
2 Years	8.55%	8.60%
3 Years	8.60%	8.65%

This reduction will have a direct impact on borrowers with floating-rate loans, particularly home loan customers, as their EMIs could decrease slightly based on the revised rates.

💰 What is MCLR and Why It Matters

The Marginal Cost of Funds-Based Lending Rate (MCLR) is the minimum interest rate at which a bank can lend money. It serves as a benchmark for determining the final lending rate for various types of loans, including home loans, auto loans, and personal loans.

Introduced by the Reserve Bank of India (RBI) in 2016, the MCLR system aims to increase transparency in loan pricing and ensure that benefits of policy rate cuts are passed on to consumers. A reduction in MCLR generally means that borrowing becomes cheaper for customers.

🏠 Current Home Loan Interest Rates

According to HDFC Bank’s official website, home loan interest rates currently range between 7.90% and 13.20%, depending on the applicant’s profile and loan tenure.

• For salaried and self-employed individuals, rates are determined by the RBI’s repo rate plus a spread of 2.40% to 7.70%.

• Since HDFC Bank’s loans are linked to the repo rate, any future changes by the RBI could further impact EMIs.

This latest MCLR cut reflects the bank’s ongoing efforts to make homeownership more affordable and align lending rates with evolving market conditions.

📊 Base Rate and BPLR Details

As per the bank’s latest update:

• Base Rate: 8.90% (effective from September 19, 2025)

• Benchmark Prime Lending Rate (BPLR): 17.40% per annum

The base rate represents the minimum rate below which loans cannot be offered, while the BPLR is generally applicable to older loan agreements.

💬 What It Means for Borrowers

This move by HDFC Bank will benefit both existing borrowers with floating-rate loans and new customers applying for home loans. Reduced MCLR rates translate to lower interest outgo and lighter EMIs, improving affordability amid rising living costs.

Industry experts believe that this step may also encourage other private and public sector banks to follow suit, potentially leading to a broader reduction in lending rates across the banking sector.

In short, HDFC Bank’s MCLR cut offers timely relief to millions of customers—helping them manage their finances better while boosting confidence in the housing loan market.