Home Loans Cheaper Now: LIC Housing Finance Cuts Rate to 7.15%

LIC Housing Finance has just dropped some good news for homebuyers. They have cut interest rates on new home loans, starting from 7.15%. This kicks in from December 22, 2025, right on the heels of the Reserve Bank of India's (RBI) latest 25 basis point repo rate cut from the Monetary Policy Committee. It is a clear sign they are passing on that relief to individuals looking to borrow for a home.

This change only hits new home loans and it is coming at a moment when buyers are pausing to rethink their plans amid shifting borrowing costs. Across the board, banks and housing finance companies are starting to share the perks of this year's repo rate drops to spark more lending in the housing market.

In a recent chat about rates, Tribhuwan Adhikari, Managing Director and CEO of LIC Housing Finance, pointed out that the RBI has trimmed the repo rate by a whopping 125 basis points over the year. That is real breathing room for borrowers. He thinks that this reduced interest rate could help first-time homebuyers as they approach 2026.

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Of course, your actual home loan interest rate will depend on things like your profile, loan size, tenure and credit score, it is not one-size-fits-all. Analysts are saying lower rates will lighten those monthly EMIs, but whether housing demand picks up will also come down to property prices, wage growth and the bigger economic picture.

LIC Housing Finance is right up there as one of India's biggest players in housing finance, with branches all over the country and even a rep office in Dubai for international customers.

Why Does This Matter for Homebuyers?

• Dropping rates on fresh home loans means smaller monthly EMIs, which can make that dream home feel a lot more reachable.
• The RBI's rate cuts are paving the way for easier borrowingjust as real estate picks up steam in 2026.
• Keep in mind, your final rate hinges on personal stuff like credit score, income, loan amount and how long you are borrowing for.

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