Best home loan interest rates in August 2025: 10 banks offering 7.3%-7.9% after Repo pause

Interestingly, the best home loan interest rates in the month of August 2025 are being offered by public sector banks. For instance, Bank of Maharashtra and Central Bank of India are offering home loans starting at as low as 7.35%, whereas Union Bank and Bank of Baroda are offering housing loans at 7.45%.

Among private sector banks, HDFC Bank and IDBI Bank are offering home loans starting below 8%.

The following is the list of banks offering the best or most affordable home loan interest rates in August, starting below 8%:

Source: Respective Bank websites as of August 6, 2025

The best home loan interest rates offered by banks are offered to customers with the highest credit scores, generally above 750 and 800. Customers with low credit scores have to pay higher interest rates.

Repo rate pause: What to expect?

The RBI decided to pause the repo rate cut. However, another reduction in the key rate in the future has not been ruled out.

This year, the central bank has already reduced the repo rate by 100 bps, which led banks to lower their repo-linked home loan rates by 1%.

SBI Research dubbed the RBI's pause on repo rate as a 'technical pause' and it believes that a window for a 25 bps repo rate cut may open up going forward.

However, the timing of another repo rate cut can't be predicted as of now.

"We may dub the today’s pause as the ‘technical pause’ as the inflation projections are hovering in the band of uncertainty (while below 3% till Q3 it may sharply increase to 4.9% in Q1 FY27). Under such a scenario (along-with expectation of robust GDP growth), we believe that if RBI inflation projections for FY26 may remain correct then 5.5% repo rate may be the terminal rate," SBI Research said in a report.

"However, if the inflations numbers does undershoot, window will open up, but at most it will be at most a 25 bps," it added.