Basics3 min read · Updated 17 October 2026
EBLR vs MCLR: which home loan rate are you on, and should you switch?
EBLR is tied to the RBI repo rate and resets at least every three months. MCLR is set by your bank. Learn how to find yours in your sanction letter and how to switch.
What the two terms mean
Your floating home loan rate has two parts: a benchmark that moves, and a spread that the lender adds. What differs is the benchmark.
| EBLR | MCLR | |
|---|---|---|
| Linked to | An external benchmark, most often the RBI repo rate | The bank's own marginal cost of funds |
| Who decides changes | RBI, and the market | The bank |
| Reset | At least every 3 months | On the bank's reset date, often 6 or 12 months |
| Passing on a repo cut | Fast and visible | Slower and less visible |
| Applies to | All new floating retail loans since 1 Oct 2019 | Older loans |
Allowed external benchmarks are the repo rate, the 3-month or 6-month Government treasury bill yield published by FBIL, or another FBIL benchmark. Most banks use the repo rate for home loans.
How your EBLR rate is built
Your rate = external benchmark + spread, where the spread includes a credit risk premium based on your repayment record, loan type and credit score. For example, if the repo rate is 5.50% and your total spread is 3.00%, your rate is 8.50%. When the repo rate rises by 0.25%, your rate rises by 0.25% at the next reset. Read the October 2026 hike explained for what that does to your EMI.
The spread normally stays fixed for the life of the loan. A lender can change it only for specific, well-defined reasons, such as a real change in your credit risk, and it must tell you openly.
How to find out which one you are on
- Open your sanction letter, loan agreement or KFS and look for the words "benchmark", "MCLR", "repo" or "EBLR".
- Note the spread and the reset date.
- If you cannot find it, ask your lender for a written statement of your benchmark, spread and reset dates. Our loan report tool reads these from your KFS in your browser.
Should you switch from MCLR to EBLR?
RBI lets existing borrowers move to a repo-linked rate. Whether you gain depends on three numbers: your current rate, the rate the bank would give you on EBLR, and the admin fee.
- If the bank offers the same or lower rate on EBLR, the move is a clear win because future cuts reach you faster.
- If EBLR is higher today, think about the next two years. A repo-linked loan is more exposed to hikes and quicker to benefit from cuts. After the October 2026 hike and RBI's tightening stance, some borrowers prefer to wait for the next MCLR reset.
- Ask for the new rate and fee in writing before you sign anything.
If the bank will not give a good rate on conversion, a balance transfer to another lender may do better.
Your rights when the rate resets
RBI's reset framework applies to floating-rate home loans. At sanction, the lender must show how a rate change affects your EMI and tenure. At each reset it must tell you and offer options: change the EMI, change the tenure, switch to fixed (a fee may apply), or prepay. The lender cannot extend the tenure in a way that leaves the loan never ending.
Common questions
What is the difference between EBLR and MCLR?
EBLR is linked to an external benchmark such as the RBI repo rate and resets at least every three months. MCLR is set by the bank from its own cost of funds and resets less often, so changes reach you slower.
Is EBLR better than MCLR for a home loan?
EBLR passes on rate cuts faster and is easier to track, which is why RBI made it mandatory for new floating retail loans from 1 October 2019. It also passes on hikes faster. Compare the actual rates you would pay.
How often does EBLR reset?
At least once every three months, and it changes only if the benchmark has changed.
Can I switch my existing home loan from MCLR to EBLR?
Yes, by applying to your bank. It may charge an administrative fee. Get the new rate and fee in writing before you decide.