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SBI Raises Home Loan Interest: How It Compares With Other Leading Lenders

 On 17 August 2025, the State Bank of India (SBI)—India’s largest mortgage lender—raised the upper band of its home loan interest rates by 25 basis points, effective 1 August 2025, elevating it from 8.45% to 8.70%, while maintaining the lower limit at 7.50%. This change comes amid the RBI’s decision to hold the repo rate steady at 5.55% during its August monetary policy review.



What Does This Mean for Borrowers?

For prospective home loan applicants, this adjustment translates to higher borrowing costs and potentially increased EMIs, depending on their credit profile and the interest rate band they fall into.

Current Home Loan Rates at Major Banks

BankInterest Rate Range
SBI7.50% to 8.70% (new upper limit)
HDFC BankStarting from 7.90% (home, balance transfer, renovation, extension)
ICICI Bank7.70% onwards (₹5 crore loans); varies by profile and loan size (8.75% to 9.80%)
Kotak Mahindra BankStarting 7.99%; floating-to-fixed switch at 12%
Bank of Baroda (BoB)Ranks between 7.45% to 9.20%, subject to CIBIL score and loan amount
Punjab National Bank (PNB)Starts at 7.45%; depends on amount, CIBIL, and tenure
Canara Bank7.40% to 10.25% range
Union Bank of IndiaAlso raised rates in tandem with SBI; reaffirms sector trend.


Broader Market Implications

This move by SBI is seen as a bellwether shift, signaling a possible broader upswing in home loan rates among public sector banks. Union Bank of India has already followed suit.

Despite recent RBI repo rate cuts totaling 100 bps since February 2025, August’s hold suggests a pause in easing policy — and SBI’s hike could mark a turning point in lending trends

Summary

  • What happened? SBI increased its upper home loan interest rate to 8.70%, effective 1 August 2025—lower limit unchanged at 7.50%.

  • Why it matters: Borrowing costs rise for new applicants; EMI impacts vary by individual credit profiles.

  • How others compare: HDFC (7.90%), ICICI (7.70%+), PNB and BoB (~7.45%), Canara (up to 10.25%); trends suggest more hikes ahead.

  • Wider context: Signifies shift in housing finance sector; Repo rate was held at 5.55%.


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