The country’s largest bank, State Bank of India (SBI), has raised interest rates on home loans for new borrowers from the beginning of August 2025, according to a report by ‘The Economic Times’. The decision was taken ahead of the Reserve Bank of India (RBI) MPC meet, which was held from August 4-6. The repo rate remained unchanged at 5.55% after the monetary policy meeting.
Since February 2025, the RBI has cut the repo rate by a total of 100 basis points (bps), providing relief to customers on home loans and other loans. But, in August, the RBI indicated that further cuts are unlikely at the moment. In such a situation, SBI’s interest rate hike could be the beginning of a new trend in the housing finance market.
SBI Home Loan Interest Rates
SBI has raised the upper interest rate of home loans by 25 basis points to 8.70%. Earlier it was 8.45%. At the same time, the lower interest rate remains at 7.50%. That is, now new customers will have to pay interest rate between 7.50% to 8.70% depending on their credit profile and loan amount.
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Home loan interest rates of other banks
Let’s see what other major banks are offering after SBI—
Bank of Baroda (BoB): 7.45% to 9.20%. Interest rate depends on loan amount, CIBIL score and credit insurance cover.
Punjab National Bank (PNB): Home loan interest rate starts from 7.45%. Rates vary on different amounts and tenures.
Canara Bank: Interest rate ranges from 7.40% to 10.25%.
HDFC Bank: Starting from 7.90%. This includes home loan, balance transfer, house renovation and extension loan.
ICICI Bank: Interest rate starts from 7.70%, but can range from 8.75% to 9.80% depending on the loan amount and customer profile.
Kotak Mahindra Bank: Interest rate starts from 7.99%. Rate up to 12% for customers shifting from floating to fixed.
Its effect on customers
An increase in interest rate has a direct impact on EMI. This small increase will increase the total cost of the loan by lakhs of rupees in the long run.
Experts believe that this increase is a sign that banks’
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