On the one hand RBI has indicated to increase the EMI of the loan by increasing the repo rate after 44 months. On the other hand, the country’s largest private bank HDFC Bank has given big news to its customers by announcing a reduction in home loan EMIs. The way has been cleared to reduce the EMIs of HDFC Bank home loan customers whose loans are linked to the ‘Marginal Cost of Funds-Based Lending Rate’ (MCLR).

The bank has reduced MCLR rates by up to 15 basis points (15 bps) for all tenures. A basis point is a hundredth of a percentage point. According to the official website of HDFC Bank, the revised MCLR rate will be applicable from October 7, 2026. After this change, HDFC Bank’s MCLR rates now range between 7.80 percent to 8.55 percent depending on the loan tenure. Earlier, HDFC Bank’s MCLR rates ranged between 7.90 percent to 8.60 percent depending on the tenure of the loan.

HDFC Bank has changed the lending rates

HDFC Bank’s overnight MCLR reduced by 10 basis points to 7.80% in October 2026 from 7.90% in September 2026. The one-month MCLR has come down to 7.75% from 7.90% in October 2026, a reduction of 15 basis points. The three-month MCLR fell to 7.95% from 8.05%, a decline of 10 basis points.

HDFC Bank’s 6-month MCLR was cut to 8.15% from 8.25% and 1-year MCLR was cut to 8.30% from 8.35%, a reduction of 5 basis points. The 2-year MCLR fell to 8.40% from 8.45%, and the 3-year MCLR also fell by 5 basis points to 8.55% in October 2026 from 8.60% in September.

What is MCLR?

MCLR is the minimum interest rate that a financial institution charges for a particular loan. This sets the lower limit of the interest rate for the loan. Unless RBI says otherwise, this rate limit remains fixed for borrowers. RBI introduced MCLR in 2016. However, the Reserve Bank of India (RBI) hiked the repo rate to 5.5% from 5.25% in its Monetary Policy Committee (MPC) meeting on Wednesday, October 7, 2026. RBI has hiked its repo rate after 44 months.