In a move that brings relief to thousands of borrowers, HDFC Bank cuts lending rates across several loan tenures by up to 10 basis points (bps). The bank’s revised Marginal Cost of Funds-based Lending Rates (MCLR) came into effect on November 7, 2025, benefiting customers whose home, personal, or business loans are linked to this benchmark rate.
After the latest revision, HDFC Bank’s MCLR rates now range from 8.35% to 8.60%, compared to the earlier range of 8.45% to 8.65%. The reduction in rates, though moderate, is expected to slightly ease monthly EMIs for existing borrowers under the MCLR-linked lending system.
What is MCLR?
The Marginal Cost of Funds-based Lending Rate (MCLR) is the minimum interest rate a bank can charge for a loan. It represents the benchmark lending rate below which banks cannot lend, except in specific cases allowed by the Reserve Bank of India (RBI).
Introduced in 2016, MCLR replaced the base rate system to ensure a faster transmission of policy rate changes to end customers. It is revised periodically, based on a bank’s cost of funds, operational expenses, and changes in the repo rate.
When HDFC Bank cuts lending rates through MCLR revisions, it directly lowers the cost of borrowing for customers tied to this benchmark.
Revised HDFC Bank MCLR Rates (Effective November 7, 2025)
| Tenure | Previous MCLR | Revised MCLR | Change |
|---|---|---|---|
| Overnight | 8.45% | 8.35% | ↓ 10 bps |
| One Month | 8.40% | 8.35% | ↓ 5 bps |
| Three Months | 8.45% | 8.40% | ↓ 5 bps |
| Six Months | 8.55% | 8.45% | ↓ 10 bps |
| One Year | 8.55% | 8.50% | ↓ 5 bps |
| Two Years | 8.60% | 8.55% | ↓ 5 bps |
| Three Years | 8.65% | 8.60% | ↓ 5 bps |
The biggest reductions are seen in the overnight and six-month MCLR, each dropping by 10 bps. This change will particularly benefit short-term borrowers or those whose loan reset periods are aligned with these tenures.
HDFC Bank Home Loan Interest Rates
According to the HDFC Bank website, home loan interest rates are linked to the Repo Rate, not MCLR, for most new loans. As of November 7, 2025, home loan rates for salaried and self-employed individuals range between 7.90% and 13.20%.
The formula used for calculating the home loan rate is:
Policy Repo Rate + 2.4% to 7.7% = 7.90% to 13.20%.
This means that any future change in the RBI’s policy repo rate can influence how much borrowers pay on their home loans.
Base Rate and Benchmark PLR
- Base Rate: 8.90% (effective from September 19, 2025)
- Benchmark PLR (BPLR): 17.40% p.a. (effective from September 19, 2025)
The base rate is the older benchmark for loans before MCLR, while the Benchmark Prime Lending Rate (BPLR) applies to some legacy loan accounts.
When HDFC Bank cuts lending rates, it indicates a broader softening of interest rates, impacting not only MCLR-linked loans but also influencing competitive trends in the banking sector.
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HDFC Bank Fixed Deposit Interest Rates
HDFC Bank also offers competitive Fixed Deposit (FD) interest rates. For amounts below ₹3 crore, the FD rates (effective from June 25, 2025) are as follows:
- For General Citizens: 2.75% to 6.60%
- For Senior Citizens: 3.25% to 7.10%
The highest interest rates of 6.60% (for general citizens) and 7.10% (for senior citizens) are available for 18 months to less than 21 months tenure.
While deposit rates remain steady, the move where HDFC Bank cuts lending rates could encourage more borrowing activity as the cost of credit falls slightly.
How Borrowers Will Benefit
Borrowers with loans linked to HDFC Bank’s MCLR will experience a marginal reduction in EMIs once their loan reset dates arrive. For example, a home loan borrower with a one-year reset period will benefit during their next reset cycle after the new MCLR rates take effect.
However, customers with repo-linked home loans (RLLR) will not be affected by this MCLR revision since their rates depend directly on the RBI’s repo rate.
Still, the decision where HDFC Bank cuts lending rates sends a positive signal, especially to retail and SME borrowers facing high borrowing costs in recent months.
