LIC Housing Finance Cuts Home Loan Rates to 7.15%, Boosting Buyer Sentiment

• Home loan rates lowered to 7.15% for top CIBIL score borrowers

• Revised rates effective for new loans from December 22, 2025

• Interest rates now closely linked to borrower credit scores

In a move aimed at reviving housing demand, LIC Housing Finance cuts home loan rates, bringing the minimum interest rate down to 7.15% for new borrowers. The revised rates will be applicable to all fresh home loan sanctions from December 22, 2025, the lender said in an official statement.

The rate cut comes soon after the Reserve Bank of India’s Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points, creating room for lenders to pass on the benefit to borrowers. The softer interest rate environment is expected to encourage fence-sitters to move ahead with home-buying decisions.

According to LIC Housing Finance, the latest revision is designed to improve affordability and strengthen buyer confidence. “At a time when buyers are cautiously reassessing their decisions, this move is expected to lift homebuyer sentiment and reinforce our commitment to making home ownership more accessible,” the company said.

Credit Score-Based Pricing

Under the revised structure, borrowers with a CIBIL score of 825 and above can avail the lowest interest rate of 7.15% on home loans up to ₹5 crore. For loans above ₹5 crore and up to ₹15 crore, the rate rises slightly to 7.45%.

Interest rates increase progressively for lower credit scores. Borrowers with CIBIL scores in the 700–724 range will see rates starting from 7.95%, while customers with weaker credit histories—particularly those with scores below 600—may face rates of up to 10%, depending on the loan amount.

Snapshot of Revised Interest Rates

• CIBIL ≥ 825: 7.15% (up to ₹5 crore)

• CIBIL 800–824: 7.25% onwards

• CIBIL 750–774: 7.45%–7.75% depending on loan size

• CIBIL 700–724: 7.95%–8.25%

• CIBIL below 600: Rates range from 9.55% to 10%

This structured pricing model links borrowing costs directly to credit discipline, rewarding customers with strong repayment histories.

LIC Housing Finance vs SBI

When compared with State Bank of India (SBI), LIC Housing Finance currently offers a marginally lower starting rate. While LIC Housing Finance’s home loans begin at 7.15%, SBI’s standard home loan rates start at 7.25%.

However, SBI continues to attract borrowers with its wider portfolio, including Maxgain overdraft-linked loans, top-up facilities, and loan-against-property products. SBI’s regular home loan rates go up to 8.45%, with higher pricing for specialised offerings.

For borrowers with high CIBIL scores seeking a simple and low-cost loan, LIC Housing Finance may emerge as the more attractive option. Meanwhile, customers looking for flexibility and bundled banking benefits may still find SBI competitive.

Overall, the decision by LIC Housing Finance to lower rates is expected to add momentum to the housing market, particularly in the affordable and mid-income segments.