Mumbai: HDFC Bank has announced a cut in its Marginal Cost of Funds-based Lending Rates (MCLR) by up to 5 basis points on select loan tenures. The revised rates came into effect from January 7, 2026. This move is expected to bring some relief to borrowers, especially those whose loans are linked to the MCLR benchmark.
A reduction in MCLR generally leads to lower interest rates on loans when they come up for reset, which can result in reduced monthly instalments.
Revised MCLR Structure Explained
After the latest cut, HDFC Bank’s MCLR now ranges between 8.25 percent and 8.55 percent, depending on the loan tenure. The bank reduced the overnight and one-month MCLR by 5 basis points to 8.25 percent. The three-month MCLR was also lowered by the same margin to 8.30 percent.
The six-month MCLR, however, remains unchanged at 8.40 percent. For borrowers with home and retail loans, the one-year MCLR is the most important benchmark. This rate has been reduced to 8.40 percent from the earlier 8.45 percent.
Longer-term rates have been kept steady. The two-year MCLR continues at 8.50 percent, while the three-year MCLR remains at 8.55 percent.
What This Means for Home Loan Borrowers?
Most home loans are linked to the one-year MCLR. The latest cut means that eligible borrowers may see a reduction in their EMIs or loan tenure at the next interest rate reset date. The actual benefit will depend on the loan agreement and the timing of the reset.
MCLR is the minimum interest rate below which banks usually do not lend, unless allowed by the Reserve Bank of India. Introduced in 2016, it is linked to a bank’s cost of raising funds and changes based on market conditions.
Other Key Rates at HDFC Bank
HDFC Bank’s base rate currently stands at 8.90 percent, effective from September 19, 2025. The bank’s benchmark prime lending rate (BPLR) is set at 17.40 percent per year from the same date.
On the deposit side, the bank is offering fixed deposit interest rates between 2.75 percent and 6.45 percent for general customers. Senior citizens receive slightly higher rates, ranging from 3.25 percent to 6.95 percent on deposits below Rs 3 crore. These rates have been effective since December 17, 2025.
