Bank of Baroda’s unbeatable 7.45% home loan rate and zero processing fees in 2025! Compare with SBI, HDFC, and PNB, explore benefits like concessions for women, and save big on your dream home. Act now to unlock affordable home ownership with BoB’s latest offer!
On July 4, 2025, Bank of Baroda (BoB), one of India’s leading public sector banks, announced a reduction in its home loan interest rate to 7.45% per annum, effective immediately. This move includes a waiver of processing fees for new borrowers, aimed at making home ownership more affordable and boosting credit growth. This follows an earlier rate cut in June 2025, when BoB reduced its home loan interest rate from 8.00% to 7.50% per annum, aligning with the Reserve Bank of India’s (RBI) repo rate reduction of 50 basis points to 5.50%. These consecutive rate cuts reflect BoB’s strategy to pass on the benefits of RBI’s monetary policy easing to customers, stimulating demand for home loans in a competitive market.
Founded in 1908 by Maharaja Sayajirao Gaekwad III, Bank of Baroda is a state-owned lender serving over 165 million customers across 17 countries. With over 2,500 branches in India and a strong digital banking presence, BoB is a key player in the Indian financial sector. The bank’s recent initiatives, including the home loan rate cut and zero processing fees, underscore its commitment to supporting affordable housing and aligning with India’s economic growth objectives.
Review of Bank of Baroda’s Home Loan Offering
Bank of Baroda’s decision to lower its home loan interest rate to 7.45% per annum positions it as one of the most competitive lenders in the market. The waiver of processing fees further enhances its appeal, particularly for first-time homebuyers and those looking to transfer existing loans from other institutions. The bank’s digital application process allows customers to apply online or through its extensive branch network, ensuring accessibility and convenience.
The rate reduction is part of BoB’s broader strategy to align with the RBI’s monetary policy, which has seen a cumulative repo rate cut of 100 basis points in 2025, starting with a 25-basis-point reduction in February and another in April, followed by the June cut. This has enabled banks to lower their Repo-Linked Lending Rates (RLLR), directly benefiting borrowers with floating-rate loans. BoB’s Baroda Repo-Based Lending Rate (BRLLR) was reduced from 8.65% to 8.15% in June, and the latest home loan rate cut to 7.45% reflects a further adjustment to make borrowing more attractive.
Sanjay Mudaliar, Executive Director of BoB, emphasized, “This latest reduction in our home loan interest rates is aimed at supporting the aspirations of citizens and stimulating credit growth.” The bank also offers concessions, such as a 0.05% rate reduction for women borrowers and a 0.10% reduction for borrowers under 40, making it particularly appealing to specific demographics. Additionally, BoB’s home loan balance transfer scheme allows borrowers from other banks or NBFCs to shift their loans with minimal documentation, leveraging the lower rates.
The bank’s strong financial performance supports its ability to offer competitive rates. In Q1 FY26 (ending June 30, 2025), BoB reported an 11% year-on-year increase in global business to Rs 26.43 lakh crore, with domestic retail advances growing 17% to Rs 2.61 lakh crore. Domestic deposits rose 8.1% to Rs 12.04 lakh crore, indicating robust growth that enables BoB to maintain competitive lending rates while supporting economic objectives.
Pros of Bank of Baroda’s Home Loan
- Competitive Interest Rate: At 7.45% per annum, BoB offers one of the lowest home loan rates among public sector banks, significantly reducing the cost of borrowing.
- Zero Processing Fees: The waiver of processing fees for new borrowers eliminates upfront costs, making the loan more affordable, especially for budget-conscious buyers.
- Digital Application Process: BoB’s fully digital application platform allows for quick and hassle-free loan applications, complemented by its extensive branch network for in-person support.
- Concessions for Specific Groups: Additional rate reductions for women (0.05%) and borrowers under 40 (0.10%) make the loan attractive to young and female homebuyers.
- Balance Transfer Scheme: Borrowers from other institutions can transfer their loans to BoB with minimal documentation, benefiting from the lower rate and streamlined process.
- Floating Rate Benefits: Loans linked to the repo rate ensure that existing borrowers automatically benefit from future rate cuts, reducing Equated Monthly Installments (EMIs).
- Strong Financial Standing: BoB’s robust growth in deposits and advances ensures stability and reliability for borrowers.
Cons of Bank of Baroda’s Home Loan
- Eligibility-Based Rates: The 7.45% rate is subject to the applicant’s credit profile, loan amount, and tenure. Borrowers with lower CIBIL scores or higher-risk profiles may face higher rates, up to 9.50% for salaried individuals and 9.60% for non-salaried applicants.
- Limited Concession Scope: While concessions for women and younger borrowers are beneficial, they are modest (0.05%–0.10%), and not all borrowers may qualify for the headline rate.
- Floating Rate Risks: Although floating rates benefit from rate cuts, they are subject to market fluctuations. If the RBI increases the repo rate, EMIs could rise.
- Premium Account Charges: While BoB waived minimum balance charges for regular savings accounts, premium savings account holders may still face fees, which could offset some cost benefits for certain customers.
- Processing Time Variability: Despite the digital process, approval times may vary based on documentation and credit assessment, potentially delaying disbursal for some applicants.
Comparison with Peers
Several public and private sector banks have also reduced home loan rates following the RBI’s repo rate cuts in 2025. Below is a comparison of BoB’s offering with key competitors, based on available data as of June 2025:
| Bank | Home Loan Rate (p.a.) | Processing Fees | Key Features |
| Bank of Baroda | 7.45% onwards | Waived for new borrowers | Digital application, concessions for women and under-40 borrowers, balance transfer scheme. |
| Punjab National Bank (PNB) | 7.45% onwards | Waived for new borrowers Under Monsoon Bonanza | Competitive rates, benefits for existing and new borrowers post-RBI rate cut. |
| Indian Bank | 7.90% | Not specified | Reduced rates for home and vehicle loans, focus on affordability. |
| Bank of India (BOI) | 7.85%–9.00% | Not specified | Lowered MCLR rates, benefits passed to floating-rate loan borrowers. |
| Canara Bank | 7.85% onwards | Not specified | Reduced rates post-RBI cut, focus on retail lending growth. |
| Union Bank of India | 7.85% onwards | Not specified | Lowered EBLR and RLLR by 50 bps, competitive for new borrowers. |
| State Bank of India (SBI) | 7.85%–9.00% | Not specified | Broad branch network, competitive rates linked to repo rate. |
| HDFC Bank | 9.05% (MCLR-based) | Not specified | Reduced MCLR by 10 bps, benefits for MCLR-linked loans. |
Analysis of Competitors
- Punjab National Bank (PNB): Matches BoB’s 7.45% rate, making it a direct competitor. However, PNB’s processing fee structure is unclear, potentially giving BoB an edge with its zero-fee offer.
- Indian Bank: Offers a slightly higher rate at 7.90%, which may be less attractive for borrowers seeking the lowest rates. Its vehicle loan rate (8.25%) is also higher than BoB’s home loan rate.
- Bank of India (BOI): With rates starting at 7.85%, BOI is competitive but slightly higher than BoB. Its MCLR reduction (e.g., 1-year MCLR from 9.05% to 9.00%) benefits a broader range of loans.
- Canara Bank and Union Bank of India: Both offer rates starting at 7.85%, positioning them as strong competitors but behind BoB and PNB in terms of the lowest headline rate.
- State Bank of India (SBI): SBI’s rates range from 7.85% to 9.00%, competitive but not as low as BoB’s 7.45%. Its extensive branch network and brand recognition remain advantages.
- HDFC Bank: As a private sector lender, HDFC’s MCLR-based rates (starting at 9.05% for one-year loans) are significantly higher, making BoB’s offering more attractive for cost-conscious borrowers.
BoB’s combination of a 7.45% rate, zero processing fees, and targeted concessions gives it a competitive edge, particularly among public sector banks. However, borrowers should consider their credit profile, as rates may vary based on CIBIL scores and loan terms.
Latest News and Developments
- Home Loan Rate Cut Announcement (July 4, 2025): BoB’s reduction to 7.45% and waiver of processing fees were widely reported, with posts on X highlighting the move as a boost for homebuyers. The bank emphasized its digital application process and concessions for women and younger borrowers.
- Q1 FY26 Business Update: BoB reported an 11% year-on-year increase in global business to Rs 26.43 lakh crore, with domestic retail advances growing 17% to Rs 2.61 lakh crore. This growth supports BoB’s ability to offer competitive rates while maintaining financial stability.
- Minimum Balance Charges Waived: From July 1, 2025, BoB waived minimum balance charges for regular savings accounts, though premium accounts still incur fees. This move complements the home loan rate cut, enhancing customer affordability.
- RBI’s Monetary Policy Impact: The RBI’s cumulative 100-basis-point repo rate cut in 2025 (February, April, and June) has prompted multiple banks, including BoB, PNB, and Indian Bank, to lower lending rates, benefiting borrowers across sectors.
- Competitive Landscape: Posts on X and web reports indicate that BoB’s rate cut is part of a broader trend among public sector banks like PNB, BOI, and Canara Bank, which have also reduced rates to remain competitive. Private banks like HDFC lag behind with higher MCLR-based rates.
Final Thought
Bank of Baroda’s reduction of its home loan interest rate to 7.45% per annum, coupled with zero processing fees, positions it as a leading choice for homebuyers in India. The move, effective July 4, 2025, follows a series of rate cuts in response to the RBI’s monetary policy easing, reflecting BoB’s commitment to affordability and credit growth. Compared to peers like PNB (7.45%), Indian Bank (7.90%), and SBI (7.85%–9.00%), BoB’s offering is highly competitive, enhanced by concessions for women and younger borrowers, a digital application process, and a balance transfer scheme. However, eligibility-based rate variations and potential risks of floating rates should be considered. BoB’s strong financial performance and strategic alignment with RBI policies ensure its ability to sustain these benefits, making it an attractive option for prospective homeowners.
