LIC Housing Finance Cuts Home Loan Rates: EMI to Reduce for Both New and Existing Customers

Good news for home loan borrowers! LIC Housing Finance Ltd (LIC HFL) has announced a reduction in its benchmark lending rate, making home loans more affordable for both new and existing customers.

The company stated in its latest press release that it has slashed its LIC Housing Prime Lending Rate (LHPLR) by 25 basis points (0.25%), effective from April 28, 2025. This move follows the Reserve Bank of India (RBI)'s recent policy rate cut announced on April 9, 2025.

As a result, LIC HFL home loans will now start from an interest rate of 8%, bringing a much-needed relief to borrowers.

How Borrowers Will Benefit

• The reduced LHPLR will directly impact the interest rates linked to floating rate home loans.

• Existing customers will see a decrease in EMI payments.

• New borrowers can now avail home loans at lower starting rates.

Although the reduction applies to the benchmark rate and not to a direct cut in loan interest rates, it still benefits borrowers significantly since the LHPLR determines the interest applicable on all LIC HFL home loans.

What Triggered the Rate Cut?

Earlier this month, the RBI reduced the repo rate by 0.25% to boost liquidity and encourage borrowing. Responding to this, LIC HFL adjusted its benchmark lending rate accordingly to pass on the benefits to consumers.

Boost to Housing Market Sentiment

Speaking on the development, Tribhuvan Adhikari, MD & CEO of LIC HFL, said,

"Our decision to reduce rates aligns with the RBI’s policy stance and current market conditions. We believe this will uplift consumer sentiment and drive higher demand in the affordable housing sector."

Clearly, the move aims to make home ownership easier and more appealing, especially for first-time buyers.

Understanding Fixed vs Floating Rate Home Loans

Home loans broadly fall under two categories:

Fixed Rate Home Loans — Where the interest rate remains constant for a specified period.

Floating Rate Home Loans — Where the interest rate varies based on market movements.

Since the LHPLR has been revised, borrowers under floating rate loans will benefit immediately as their EMIs adjust according to the lower benchmark.

Final Takeaway

With home loan interest rates now starting from 8%, and floating borrowers poised for reduced EMIs, this is an excellent time to consider home ownership or refinancing your existing loan.

Borrowers are encouraged to review their loan agreements and consult with LIC HFL to maximize the advantages of the new rates.