LIC Housing Finance Cuts Home Loan Rates to 7.15 Percent After RBI Repo Rate Reduction

Home Loan Relief: LIC Housing Finance Lowers New Lending Rates Ahead of 2026

LIC Housing Finance Ltd. (LIC HFL) has announced a reduction in interest rates on new home loans, bringing lending rates down to 7.15% onwards , effective December 22, 2025 . The move comes in response to the recent 25 basis point repo rate cut by the Reserve Bank of India’s Monetary Policy Committee (MPC) and is expected to provide fresh momentum to the housing market.

Linked to RBI’s Monetary Policy Easing

The rate cut aligns with the RBI’s accommodative monetary stance. During 2025, the central bank implemented a cumulative 125 basis point reduction in the repo rate , aimed at stimulating economic growth and easing borrowing costs. LIC Housing Finance’s decision reflects the transmission of these policy measures to retail borrowers, particularly in the housing finance segment.

Boost for Homebuyers and Housing Demand

According to Tribhuwan Adhikari, Managing Director and CEO of LIC Housing Finance , the sustained reduction in policy rates throughout the year has offered significant relief to homebuyers. He noted that as India moves into 2026, the lower lending rates are likely to boost confidence among first-time homebuyers and support housing demand. Reduced EMIs are expected to improve affordability, especially for middle-income households.

Market Outlook for 2026

Industry observers believe that lower home loan rates could help revive residential real estate demand after a period of cautious buying. Affordable financing, combined with stable property prices in many cities, may encourage fence-sitters to enter the market. LIC Housing Finance, one of India’s leading housing finance companies, is positioning itself to capture this renewed demand by offering competitive rates.

What to Note for Exams?

• LIC Housing Finance reduced new home loan rates to 7.15% onwards .

• The rate cut is effective from December 22, 2025 .

• RBI cut the repo rate by 25 bps recently ; total cuts in 2025 amounted to 125 bps .

• Lower rates aim to support first-time homebuyers and housing demand .