Still paying high home loan EMIs? This one switch could save you over ₹3 lakh. Here’s how

If you’re still servicing a home loan on MCLR, base rate, or BPLR, switching to a repo-linked home loan could slash your EMIs and deliver long-term savings, financial experts say.

Repo-linked loans—also known as External Benchmark Lending Rate (EBLR), Repo Based Lending Rate (RBLR), or Repo Linked Lending Rate (RLLR)—are tied directly to the Reserve Bank of India’s (RBI) repo rate. This means when the RBI lowers the repo rate, your loan interest rate and EMIs follow suit—usually within three months. This faster rate transmission is a key advantage over MCLR or base rate loans, which reset less frequently and often with lags.

As of 2025, repo-linked home loans are typically cheaper than MCLR-based loans. Rates for top-tier borrowers hover between 8.10% and 8.35%, while many MCLR loans remain above those levels.

Switching can yield meaningful savings. Consider this:

• On a ₹50 lakh loan, a 0.5% drop in interest can save ₹1,595 monthly—₹3.82 lakh over 20 years.
• For a ₹40 lakh loan, that’s ₹1,255 per month saved, or over ₹3 lakh in total.
• Depending on the benchmark you switch from and loan size, annual savings range from ₹7,457 to ₹38,036.

Unlike MCLR, which depends on internal bank decisions, repo-linked loans are benchmarked to the RBI’s publicly available rate, making them more predictable and transparent.

There may be small processing fees or charges for switching, but these are often offset by the long-term interest savings. Borrowers with good credit scores tend to get the best deals, so checking your credit profile is advised before switching.

“Borrowers paying 50 bps or more above the current market rates should consider switching to a repo-linked home loan to save on interest costs,” Adhil Shetty, CEO of BankBazaar.com, was quoted as saying in a CNBC-TV18 report.