The floating interest rates for existing customers would be reduced by 0.50 per cent on EMIs falling due on July 1 and payable on August 1, a release said.
The move follows a reduction in the company's cost of funds and improvement in operational efficiencies, it said.
With this reduction, the third by LIC Housing Finance in the calendar year, the total reduction has reached 2 per cent in the last six months.
The company had earlier reduced 1.50 per cent for its existing home loan borrowers in two tranches of 0.75 per cent each in January and April.