LIC Housing Slashes Home Loan Rates to 7.50% — RBI Cut Triggers Big Relief for Buyers!

In a move set to cheer prospective homebuyers, LIC Housing Finance has reduced its interest rate on new home loans by 50 basis points, bringing the starting rate down to 7.50%. The rate revision comes in direct response to the Reserve Bank of India’s (RBI) recent repo rate cut, marking the financial institution’s effort to pass on the benefit to customers.

The revised home loan rate took effect on June 19, 2025, coinciding with LIC Housing Finance’s 36th Foundation Day. The company said the decision aims to make home ownership more affordable and accessible, particularly for first-time buyers and middle-income families.

“As we mark our 36th Foundation Day, we remain committed to making home ownership more accessible,” said Tribhuwan Adhikari, Managing Director and CEO of LIC Housing Finance. “This rate cut aligns with RBI’s monetary easing and ensures that the benefit reaches our customers quickly.”

The RBI, in a proactive effort to revive economic momentum, has cut the repo rate by 100 basis points since February 2025. The most recent cut was widely seen as a frontloaded policy move to stimulate demand across sectors, especially in housing and infrastructure. However, RBI Governor Sanjay Malhotra has signaled that the scope for further cuts remains limited.

LIC Housing Finance’s move is expected to boost demand in the housing sector, especially in the affordable and mid-segment categories, which are highly sensitive to interest rate fluctuations. The rate reduction could also prompt other lenders to follow suit, potentially triggering a broader interest rate war in the housing loan market.

LIC Housing Finance Ltd, promoted by Life Insurance Corporation of India (LIC) in 1989, is among India’s largest housing finance companies. With a wide pan-India presence and an overseas representative office in Dubai, the company serves millions of customers through both direct channels and its subsidiary, LIC HFL Financial Services Ltd.

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